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Salary Transparency Actually Improves The Workplace

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How much do you make? If this question makes you wildly uncomfortable, you're not alone. In the American workforce, it's still largely taboo to discuss pay—so much so, some employees are all but threatened to keep quiet. But if your coworker is making twice as much as you for no reason, shouldn't you know?

Now, the old rules are beginning to fall away. Recent studies reveal actual links between pay transparency and improved employee motivation and productivity.

Some Healthy Competition

If you think your salary is fair, should it matter that John Doe makes twice as much as you for the same job (even with a comparable background)? As New York Magazine puts it plainly, "when salaries are kept secret, unsavory employment practices — including gender discrimination — can flourish." For this reason, certain states have started to adopt new regulations to put the power back into the hands of employees. Contrary to popular belief, it isn't illegal to discuss salaries, but your employer may prefer that you keep it under wraps.

A 2016 study out of Tel Aviv University employees will work together more effectively when pay is transparent. This may seem odd at first, but it makes sense: if you're privy to coworkers' salaries, or perceived expertise, you'll know which "experts" to seek guidance from. The study calls this "efficacious help-seeking." Another study out of University of California, Berkeley found that employees actually worked harder and more productively when they were able to compare their salary to those of others. In other words, a little healthy competition can be a good thing.

Who Run The World?

On the topic of gender, the Berkeley study found that "women supply more labor regardless of whether they learn they occupy high or low relative standing, while men supply significantly more labor only upon learning they occupy high relative standing." The study supports research from Gitter and Bamberger, who found that "two things are true: One, pay transparency makes employees work harder, and two, pay secrecy leads to a decline in performance." While pay transparency isn't the only answer to eliminating discrimination in the workplace, the research proves that it's certainly a step in the right direction.

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