Checking Pay
How much do you make? Is the co-worker in the next pod, the one who started about the same time you did, making more or less than you?
The question hangs in the air at most workplaces, but you’re either too embarrassed or too intimidated to ask it. After all, the boss told you when you were hired that the company frowned on employees comparing pay stubs. And your mother told you it was rude to ask people how much they earn.
So you keep quiet, becoming a conspirator in one of American management’s most commonly kept secrets from employees--exactly how your salary stacks up to those of people around you.
What if it didn’t have to be that way? What if everyone at work could know what you earn and you could know what they earn? Would you want to?
Don’t go to work for Whole Foods Market, the natural foods grocery chain, if you would rather not. At each of the chain’s stores, any employee can walk into the manager’s office and browse through a notebook that lists everyone in the company and his or her salary and bonus, updated annually. If you find someone making more than you in a comparable job, you can expect a rational explanation.
It is part of what the Austin, Texas-based company calls its “open book” policy of sharing information on wages, bonuses, company profit and other facts with every one of its more than 15,000 employees at all 95 of its stores across the nation.
“Having an open-book policy does have its problems,” says George Khoury, manager of the chain’s West Los Angeles store. New employees, he said, are sometimes “kind of taken aback that they are in control of their destiny, that they are in control of their wages, that they and their team members have control over their future.”
But the company “has a philosophy of shared fate, shared success,” Khoury said. Salary at the nonunion chain “is performance based.”
Whole Foods’ policy of total disclosure is a radical example of what business consultants say is a gradual trend away from salary secrecy.
In a workplace that grows ever more fluid, and where competition for skilled labor is stiff, employers are finding more reasons to share information with their workers. “There are corporate giants who are spending time and money to communicate to employees the reasons they have set up their compensation systems,” said Stephen Kellerman, principal of Kellerman & Associates, a human resources consulting firm in San Francisco. “I tell clients that one of the keys to a successful compensation plan is the perception of fairness among employees.”
Kellerman said he has no client who is willing to go as far as Whole Foods, but more and more are willing to disclose ranges of pay within job titles.
What many employees and employers don’t know is that in California, it is illegal for employers to prohibit workers from discussing salaries, said labor lawyer Frank Cronin, with Snell & Wilmer in Irvine. “I still have clients who will put a line in an employee handbook saying it is prohibited by company policy to disclose salaries,” Cronin said. “I have to tell them to strike it.
“It is sort of obvious why management prefers that workers not discuss these things,” said Cronin, who has represented management in labor disputes for more than 20 years. Comparing salaries “sows discord and uncooperative behavior among workers and creates pressure on management.”
Nonsense, said Jeffrey Pfeffer, a Stanford University business professor who has written caustically of American management practices. “Soon as I tell you, ‘You can’t see the salaries,’ it makes it much more intriguing. You want to know, ‘What are they trying to hide?’ ”
Because “99.9% of organizations in America do not want to build an organization on trust,” they would find the Whole Foods approach frightening, Pfeffer said.
That is just fine with John Mackey, founder and chief executive of Whole Foods. “I’m not all that eager to convert the rest of the world to this way of thinking,” he said. “It is part of what makes our company unique and gives it a competitive advantage, that Whole Foods has an empowered organization that believes in trusting people.”
Mackey said he decided to institute the disclosure policy 15 years ago, when Whole Foods was a struggling new company, to put an end to “people constantly making false assumptions about what I was getting paid and others paid.”
At first, Mackey said, he published only the salaries and bonuses of the company’s top 50 executives, including his own. “Then I just said let’s put it all out there.”
The company must be doing something right, Mackey said. It has been named one of the top 100 U.S. companies to work for by Fortune magazine for the last two years and last year did $1.4 billion in sales.
The open-book policy “doesn’t eliminate envy from the human heart, but it doesn’t let it fester. It allows people to talk about it,” Mackey said. “If someone is making more than you, you can talk to your team leader about it.”
