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From a young age we are always told never to discuss politics or religion but there is always the third taboo and that is money.

It is not uncommon for employment contracts to have clauses that effectively prohibit salary conversations with peers but inevitably someone is always indiscreet and through careful calibration everyone eventually has a rough idea what everyone else is on.

A study by Ben Greiner “revealed when people knew what their peers were earning, higher paid workers tended to work more accurately and actually increased their efforts, while low earners under piece rates increased work quantity at the expense of quality and were more inclined to shirk. When wages were kept confidential there was no difference in performances – so wage differentials cause performance to change only when transparent.”

Effectively the argument against transparency works upon the lines of staff become de-motivated if they feel relative to their peers they are underpaid and transparency drives up wages costs.

How wages are calibrated within a workplace can become a terse issue particularly when the pay rise seems not to correspond to any demonstrably achievement.  Can we attribute the perceive discrepancy to the beauty premium  where Andrew Leigh and Jeff Borland’s study found attractive people enjoyed a 20% premium on hourly rates?

What are your thoughts?

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