Salary Confidentiality 13

[Medeski]

Hello ladies and gents,

We recently extended an offer to a new EE grad. We work in a small office (6 people not including sales staff who work at a kiosk). Though the new hire will initially be making less than most in the office, we are writing in a pay bump after one year that will have him making more than some people, including technicians who are 20+ years older (though have only worked here less than a year).

When he starts working, I was thinking of just sitting down with and asking him if he would please keep his salary information confidential in the office to avoid any issues. I don't know if I need to go any further than that, but as we haven't written his contract yet, is it prudent to put something in there as well? He doesn't seem like a blabber, but he hasn't started working yet and it's only our second engineering hire.

Just wondering if anyone has any input and experience in the issue. Thanks in advance!

 

[MacGyverS2000]

People will talk about whatever they are comfortable with, even if specifically told not to (though in those cases they'll usually whisper about the subject rather than talk at a normal volume). The younger generation seems to have less reticence about sharing personal info (we've discussed this here before)... a fresh grad we hired a year ago had no issue with telling everyone within earshot his salary, much to the consternation of those more experienced who made less. You could mention it face-to-face, but I wouldn't put it in the letter specifically... just to cover your bases, you could write something in the footer like "The information contained within this letter is to be considered for your eyes only...".

If you have to sit him down like a little kid and explain in detail everything he should / should not discuss, you should reconsider hiring him for your particular environment.

That said, you shouldn't feel guilty about paying a more capable (but younger) person more money... there's a reason you're compensating this guy more than the other techs, right? If this guy is not more capable, well, then you have a hiring issue that will not bode well long-term for your company. Info will get out, what matters is how the information is viewed by all involved. If you have good-natured people and your choice to offer this guy more money in the long-term was based upon solid logic, it will be a non-issue. If at least one of your employees is not good-natured, well, expect a LOT of turmoil when the truth comes out.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[Medeski]

Thanks for your input. Everyone in our office is good natured and I don't think it would be a problem. I wouldn't specifically sit him down to just go over that one point, but more along the lines saying "We'd appreciate if you would keep your salary information private in the office" during his orientation the first day and be done with it. I know at my last two jobs no one talked about salaries. I guess maybe I have a bad taste in my mouth from the last service guy who would go around asking the other service guys at our company and the other tenants in the same building how much they made and bragging how much more he could be making doing electrical contract work. We fired him a few months ago and he's back doing electrical contracting work making "80K" but somehow still has to live with his grandma. I should say the other guy in the office is a "service guy" not a "technical guy". Thanks again.

 

[JohnRBaker]

I was confronted with a situation like this years ago when I was running a pre-sales support group in Detroit. I hired an engineer for our Milwaukee office and while company policy stated that no one was to share the details of their compensation with any other employee, which was pretty standard faire whevever I had worked. Anyway, I paid this guy a fairly good salary because he was both very qualified and he was going to be the only pre-sales guy in our Milwaukee sales office and so he had to be a self starter which I was assured that he was.

However, the problem was that his older brother also worked for the company, in another city reporting to a different manager (it was from his brother that the guy I hired had even heard about the job in the first place). Anyway, a few weeks later I got an irate phone call from my fellow manager complaining that I should have made it clear that salaries were to be kept confidential and it seems that the guy I hired had told his older brother what he was being paid and it turned out to be significantly more than he was making despite having worked for the company for five years or so. And to add insult to injury, his kid brother was given a higher level job title, Consultant versus Associate-Consultant (which I always considered an entry level position for someone with little or no relevant experience which was NOT the case for the guy I had just hired, thus the level I hired him at). I tried to explain to the other manager that it was naive to think that you could keep brothers from sharing information like that and besides, I had no idea what the old brother made nor for that matter what his exact title was since he didn't work for me and I felt no obligation to double-check salaries that were being paid to people who did not report to my part of organization. I never got into any trouble over this since my boss understood completly and besides I had been told to hire the best people I could find and the salary and title given was well within the guidelines for that position so I was covered, but that other manager never forgave me. It seems he had to promote the older brother and give him a big raise, something he probably should have done years before since he had not promoted his employee from that entry-level position he started at five years earlier, so in the end I never felt sorry for what I did ;-)

Anyway, the point is that even if it's formal company policy, you can't really expect people to remain mum about stuff like this.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

 

[zdas04]

I worked at a company that had the (normal) "you can't talk about your salary" policy. One of the guys working for me did not like this policy. When he got his salary advice (with the raise percentage on it) he tapped it to his door for everyone to see. It stayed up for a couple of days and then mysteriously disappeared. The year after he did this the first time, the best raise I could get for him was exactly one full percent below the minimum of the recommended range. He posted it on his door. The next year the best I could do was 2 percent below the minimum of the range. He was pissed. I told him that management has a long memory and if he posts this one he should expect next year to be 3 percent below minimum and if the minimum is below 3% then he should expect a pay cut. He started yelling at me that it was "unfair". I told him to do what he wanted. He didn't post it. The next year his raise was in the middle of the range. During that year we had layoffs and he was at the top of everyone's list. Not a bad guy, pretty good at his job, unwilling to even give lip service to policy. A liability that I didn't need.

Bottom line is that the policies are absolutely unenforceable. You are better off having a talk with him and letting the cards fall where they may.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

 

[IRstuff]

Do you have an employee manual/policy? These are the sorts of things that should be spelled out in the manual.

I can't really think of a time when someone's salary was the subject of a discussion, unless it was about what we thought a particularly obnoxious manager was making. Generally, companies will have salary ranges for different job grades posted, and that's generally enough to satisfy most peoples' curiosity. Given the unique situation you have with this employee, I think a discussion about the ramifications of revealing his salary should be in order.

People will and can find out, eventually, and there are always soreheads in any sizable group of people. I got lots of negative vibes from a couple of technicians at one job, because I was making more than them, and it appeared to them that I had a cushier job. The difference, of course, was that I was a BSEE-to-be, and they were high school dropouts, but that wasn't ever in their considerations.

TTFN
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[JedClampett]

I wouldn't mention it (not talking about salary) at all. Most people just naturally want to keep it a secret and if you mention something to him, he might be curious about what the big deal is.
We had a guy here who printed his pay stub on a common printer and didn't pick it up. Most of the people who looked at it (after it was conveniently pinned to the wall), weren't mad about the amount, but that the guy was printing it out at all.
If there is a good reason to pay someone less than someone else, just be prepared to explain it. If they ask, you'll have your case ready. It might be uncomfortable, but it also might be a teachable moment.

 

[DRWeig]

I'd like to post everyone's salary on the company bulletin board. It would cut down on the rumors, exaggerations, and flat-out lies that co-workers tell to one another. Anybody on board with me?

That said, I'll quote my dad from his first day on the job (back in 1938):

Boss: Ralph, we make it a policy not to talk about salaries around here.

Dad: Don't worry, Mr. Merriwether, I'm embarrassed about it too.

Best to you,

Goober Dave

Haven't see the forum policies? Do so now: Forum Policies

 

[Medeski]

Thanks for everyone's replies. We don't have a company handbook yet, but we are getting one made for next year. I agree that if someone is curious enough, salary information will get out, especially with sites like glassdoor. Perhaps a "no-whining" policy enforced by instant termination would be better. Thanks again.

 

[berkshire]

Medeski (Mechanical)
enforcing a " do not discuss your salary.", policy is like trying to herd cats. As both an employee, and an employer, no matter what you say or do about this, sooner or later the information will get out.
If you terminate the leakers, you may find that instead of people you think are just mal-contents, you may find some of your better people involved.
The better way is to post an official attitude of " You are paid what you are worth to the company.", with a note that if you want more, find ways of being more valuable to the company.
B.E.

You are judged not by what you know, but by what you can do.

 

[FlashSet]

In most of our proposals we have overhead rates directly associated with names; not much to hide there.

 

[Medeski]

Berkshire - I'm sure that you're correct. We are a new, small company so we don't have any policies in place yet. I was being a bit facetious with my "whining=instant" termination remark, though after a rather sour experience I know now it's best to nip negative attitudes in the bud, even it's against my nature to be confrontational. We are in an "at will employment" state after all and if someone is constantly complaining they should be making more, they are more than welcome to find another job that would remunerate them "fairly".

 

[berkshire]

Medeski (Mechanical)
If you have someone constantly complaining they should be making more, sit down with them, to see if there is any basis in fact.
I got into this scenario with an employer many years ago who essentially told me to put my money where my mouth is. I left his employ and got a job with his next door neighbor, at 50% more than I was making with him.
As an employer I have also lost good employees to other companies. These employees left for the same money, but much better health plans, that I had no way of matching.
With the current health plan turmoil, I can see this happening again.
B.E.

You are judged not by what you know, but by what you can do.

 

[SNORGY]

Let people be as petty as they need to be, then keep the ones who aren't.

 

[dvd]

My reactions to most salary secrecy discussions:

Divide and conquer.

What makes the EE new-hire worth more than other employees? When it becomes a struggle to get a fair days pay for a fair days work then it's not fair anymore. I am not big on deal-cutting all over the office. Do the most assertive deserve more than the best qualified? I don't like negotiating, it's not my thing; however, I think that I deserve to be fairly compensated. I believe that a salary review for all employees in the office is in order instead of a gag-order on salary discussion. If the company can only afford to fairly compensate one employee, then something is wrong.

 

[Medeski]

dvd - I feel that everyone in the office is being compensated fairly. Of the 6 people in the office, 3 (including myself) take little if any salary as we are part owners. Of the remaining, one is a service technician that is a hard worker, reliable and making above market level for that position and the others are accounting and sales manager which I don't really deal with their salaries. The EE will also be making a fair salary, but in a year or two will probably be making more than the service technician if he performs well. I guess I wasn't sure if it was standard to have any office policies in place regarding salaries. According to the previous posts, it seems like even if there is, they are aren't followed by most people anyway.

 

[fel3]

FlashSet…

In the 1990s I worked for a large engineering company that did the same thing. Each time I prepared a fee proposal, I had to call each person on the project team and ask them how much they made. There were no mysteries and, frankly, no surprises. However, none of us liked it very much. Most other places I have worked binned people into groups (e.g. Principal Engineer, Senior Engineer, etc) with set billing rates.

==========
"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill

 

[kylesito]

I'm of the younger generation and I wouldn't dream of sharing salary info around the office! I thought this was understood...but I guess not. In my mind, you compare you salary to industry, not a particular company. If you find your company isn't compensating you to the average, or isn't providing you with other intangible benefits to make up for it, then you think about leaving. But I never would think of sharing salary info around the office!



PE, SE
Eastern United States

"If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death!"
~Code of Hammurabi

 

[GregLocock]

Well that's you. In a large company it seems unlikely that wage negotiations would proceed in a fair fashion if only one side knows all the information. BTDT. On the other hand in a smaller company we negotiated a certain formula for pay rises, and when an external change occurred, voluntarily accepted a 33% reduction in that formula.

Cheers

Greg Locock


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[IRstuff]

Unfortunately, it's one of those human nature things. Whatever arrangement you were satisfied with prior, becomes unsatisfactory if you find out that Joe Blow got 5% more.

I don't think I've ever known what a peer made, unless it was by accident or by inference from the contract rate we charged someone. Most of anything else is moot; there's only a couple of people who do anything comparable to what I do in the company.

TTFN
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