What the Research Says About the Effects of Open Pay Policies on Employees’ Pay Satisfaction and Job Performance

Abstract

Does pay satisfaction improve when employees are informed about company pay policies, programs, salary ranges, and average pay increase amounts? Conventional wisdom in human resource management would say that they do and that providing this information is a “no-brainer.” Surprisingly, research on the topic of pay secrecy indicates a mixed picture on the benefits of “open pay” initiatives and shows that the majority of organizations have not taken the first steps to inform employees on pay matters. HR practitioners considering whether to provide more pay information to employees will benefit from learning about what is settled knowledge concerning the value of releasing pay information to employees.