Fog Creek Software Inc., a 20-year-old software company and PayScale customer, recently received some well-deserved attention for revealing the salaries of all its employees.
Starting in mid-2016, the company CEO – Anil Dash – announced that the company would publish salary ranges of all their jobs (individual salaries were not disclosed). By September of 2017, every employee got access to a Google spreadsheet with titles, levels and the corresponding salary bands of everyone in the company.
Why Did They Do This?
According to Dash, the company’s CEO, it’s because salary transparency would “shine a light on unfair pay practices” and eventually lead to overall changes in wages for employees.
“Transparency is not a cure-all and it’s not the end goal, it’s a step on the way to the goal, which is to be fair in how we compensate everyone,” Dash said an interview with Bloomberg.
At a time when women on average make 78 cents what men do, and white men receive raises far more often than people of color, we think it’s a great move for Fog Creek to give employees the information and the power to advocate for themselves.
How They Ensured that Nothing Bad Happened After They Made the Big Reveal
According to Dash, Fog Creek Software opted to introduce salary transparency slowly, deliberately and with a lot of communication.
First, they surveyed their team internally anonymously, and asked people what they wanted to share. They ended up sharing salary “ranges” for each role in the company, rather than a specific number for each person. They also decided to support employees in sharing their pay info with each other.
Then, Dash announced at a company meeting in mid-2016 that the company would be publishing salary ranges for every job. But they would not disclose individuals’ salaries.
He invited employees to comment; people could share thoughts, feelings and opinions anonymously via an internal survey after this meeting.
Between the announcement made in 2016 and when they revealed all this information to all employees in September 2017, the company took its time to prepare for the big reveal. Dash acknowledged that PayScale tools were very useful in their prep work.
Today, this state of pay transparency has become the new normal: “If anything, it makes it easier for us to do reviews or raises because everything is predictable. And salary transparency helps in hiring because people know exactly what they’ll earn.” Dash said.
[clickToTweet tweet=”Salary transparency helps in hiring because people know exactly what they’ll earn.” quote=”salary transparency helps in hiring because people know exactly what they’ll earn.”]
What’s Next for Fog Creek?
Fog Creek is just beginning its transparency campaign, said Dash. The company will continue to tinker with ranges and job titles and potentially bring even more transparency, communicating with employees along the way. “This is an industry that is very, very generous in a lot of ways with compensation,” Dash said. “So why not make it a fair and level playing field?”
Resources for Pay Transparency
As the Fog Creek example demonstrates, transparency isn’t an on-off switch. It’s a spectrum. To determine how much pay information you want to disclose to your employees, you’ll need to consider your culture, the traits of your employee population and your overall readiness.
There is more than one path to transparency. Moving toward higher levels of pay transparency is a step in line with making clear choices, having strong intentions about pay strategy, being consistent across the organization, and communicating to employees the rationale for pay and pay decisions.
Tell Us What You Think
Has your company recently moved to a higher level of pay transparency? Why did you do it and what was your process? Share with us below or on Twitter.