Now that one firm is allowing staff members to decide colleagues’ salaries, Reward Strategy asks if this is the way forward for fairer pay.
The equal pay information and claims bill 2020 was first introduced to the House of Commons in October last year, which would grant employees the right to know the salaries that their colleagues earn.
In addition, the bill would make it mandatory for companies with 100 or more employees to report both gender and ethnicity pay gaps.
While the bill would help to stamp out inequality and pay gaps within organisations, the notion of pay transparency has long been considered a risky option within workplaces, as employers fear it will create friction among team members who question why a colleague is on a higher salary than them, for example.
Because of this, around 18% of UK workers have been told that they aren’t allowed to discuss what they earn with their colleagues, as revealed in a TUC and GQR study in 2020.
Giving employees control
With these concerns in place when it comes to revealing what employees earn, should staff members instead be given the control to set what their colleagues earn?
An Argentinian software firm, 10Pines, does just that. In addition to that, the business also shares 50% of its profits with its staff members. But the company’s founders believe that this unusual approach is in fact working.
Co-founder Jorge Silva said: “We tried to find a response to the classic problem in our industry: people doing the same job but earning different salaries,” reported Positive.News.
“Often, a new starter begins on a higher salary than existing employees. They might be needed urgently, or might just be better at negotiating. We try to eliminate that unfairness: if you do the same job, you can expect the same salary.”
While 10Pines’ strategy may seem more extreme to employers looking to encourage fairer pay, could this be the way forward to truly stamp out pay gaps within workforces today?
Labour MP Stella Creasy, who is backing the potential equal pay information and claims bill 2020, certainly thinks that revealing salaries is the way forward, as she previously stated: “Pay discrimination becomes so prevalent because it is hard to get pay transparency.
“Unless a woman knows that a man who is doing equal work to her is being paid more, she cannot know if she is being paid equally.”