Pay transparency: How much disclosure do employees want?

Summary

William Heisler's 2024 paper, "Pay transparency: How much disclosure do employees want?", published in *Business Horizons*, delves into the multifaceted concept of pay transparency within organizations. The research emerges amidst growing societal and governmental pressure to increase pay disclosure, particularly as a mechanism to combat issues such as the gender pay gap. The paper posits that pay transparency is a complex construct, not a singular policy, and its effects are contingent upon the specific information revealed. While the full methodology is not available in the provided snippets, the abstract indicates that the paper proposes a novel framework. This framework deconstructs pay transparency into various "types and levels" across three continua. This approach allows for a more nuanced understanding of how different disclosure strategies might be perceived and preferred by employees. The research likely synthesizes existing literature, conceptual models, and potentially draws on qualitative insights to build this framework, offering a structured way for organizations to assess their current transparency practices and plan future changes. The paper also discusses the origins of the gender pay gap and provides a brief history of pay transparency, setting the stage for its proposed framework. The findings, as extrapolated from the abstract and supporting information, suggest that the desired type and level of pay transparency vary among employees. The paper provides guidance for organizations contemplating increased pay transparency, acknowledging that while it can help narrow earnings gaps, reduce turnover, and foster trust, it also carries potential risks and can lead to negative outcomes if not managed effectively. For instance, certain forms of horizontal pay transparency could lead to overall lower average pay due to aggressive bargaining by firms, or disgruntlement among employees who perceive themselves as unfairly underpaid. Ultimately, the paper aims to equip organizations with strategic recommendations for navigating the evolving landscape of pay transparency, emphasizing the need for careful consideration of what information is disclosed and how it is communicated to employees.