Transparency, transparency, transparency

Boy, I feel like Steve after writing my post title. šŸ™‚ Anyway, one of the things I’m a big proponent of is transparency in companies. Transparency in decisions that sr. management make and in status for work happening in various groups. In my experience (for example), I’ve heard of some managers not letting their direct reports send out status reports for their project fearing they will generate too many questions. Frankly, if you work for an org that punishes you for telling the truth, it’s time to go.

I just came across an interesting post along the lines of transparency. Openness in hiring. Joe Kraus, one the original founders of Excite, just started blogging about experiences with his new startup. In one post, he makes a great point about being open about employee salary.

Putting everyone’s salary in the open forces:

  1. decision makers to be able to openly defend why they paid so much for the person. It’s not wrong to pay incredibly talented people extraordinarily well. You just need to be able to explain it to others.
  2. the person hired to know that he better perform. The pressure is on.
  3. the person hired to consider compensation equality going into the negotation because he knows his salary, options, bonus and severance are going to be public immediately. It actually gives the company more negotiating leverage in salary discussions.

All great points. Michael effectively made this same point to me many times. When he was at Apple, engineers knew exactly how much the pay bands were for the next promotion level. At the time I thought that information would only distract employees. But over time (having gone through reviews for folks reporting to me), I’d love to have salary information more public as well as information for who were the top performers in the company. Sometimes managers are effectively handcuffed for what they can do for their employees. Openness forces questions to be asked at all levels of the company. For example, if I’m a top performer and get paid half of what another top performer get’s paid, I should be able to ask “what do I need to do to get to that pay level too?” The benefit to employers over the long term is decisions made by managers are tuned for optimal efficiency.

Now there are sometimes legal reasons for lack of transparency and of course competitive reasons (not wanting a secret project to get out). But all of us know how much it bothers us when the government doesn’t share with whom they meet in generating a new policy or law. It’s too bad the private sector (in many cases) often follows the leader.