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Should the whole world know how much you earn?

Knowledge, as we know, is power. So what if this referred to your own salary?

The salaries of public servants, politicians and CEOs are disclosed. This leads to greater debate about earnings, with some arguing that it leads to greater parity in wages as the lower paid are more likely to ask for – or demand – a raise.

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In Australia there are campaigns to lower CEO wages. For example, the Australian Council of Trade Unions has an Executive Paywatch outlining disparities in the rise of executive income compared to ordinary workers.

But what about the rest of the employment market? Should ordinary Australians disclose their salaries? Most of us react with horror to the suggestion. You could even call it an Australian workplace taboo.

trust, hands

Transparency leads to greater trust.

Why disclose?

UK-based social media company Buffer went public with their salaries late last year, claiming that this would lead to greater transparency in the company.

Transparency breeds trust, and that’s one of the key reasons for us to place such a high importance on it.

“Transparency breeds trust, and that’s one of the key reasons for us to place such a high importance on it,” Buffer CEO Joel Gascoigne wrote.

Organisational psychologist and Professor of Career Education and Development at Australian Catholic University Jim Bright agrees that disclosed salaries can lead to openness in an organisation and could address gender equality.

“I think that means everyone knows where they are and it can lead to some degree of egalitarianism in terms of pay and conditions,” Professor Bright says.

“You can look at an inequality issue simply by looking at average pay rates for a particular grade or a particular role in an organisation if you’ve got a big enough organisation.

“Under those circumstances, I absolutely agree that collecting aggregate data on salaries and conditions is extremely useful to avoid any discrimination.”

• Click on the owl to learn why CEOs and politicians disclose their pay

Open salaries also gives more power to the individual employee, who will be able to find out if competitors are paying more for the same job, or if they are earning less than the person sitting next to them.

But it could be a bad move

Professor Bright believes that disclosed salaries could have the potential to make it harder for small business to hold on to valued staff.

colleagues fighting

Tensions could mount between differently paid colleagues.

“In a small organisation perhaps you can’t afford to lose that person; it could be highly disruptive. If that’s all publicly disclosed, it creates problems.”

Hays Recruitment public sector director Kathy Kostyrko says that public salaries may also encourage a stigma in the workplace.

“That somewhat gives you a stigma as to ‘you’re a lower level than me’ and ‘I’m a higher level than you’ and that very much is the way that people would look at themselves and the status of themselves in the organisation,” Ms Kostyrko says.

Professor of Human Resources Management and Organisational Studies at University of Sydney Business School, John Shields, says disclosing salaries is unlikely to improve trust in an organisation that does not already have it.

“If you suddenly put everyone’s pay outcomes on the table in a low trust culture, almost certainly what you’re going to do is to make the place even more toxic. You’ll prime the whole discussion to be about pay dissatisfaction,” Professor Shields says.

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