Softworks Blog

Workplaces with pay secrecy have more strained employee relations?

Posted by Triona Cahalane on Mon, Jul 16, 2012

New research from CIPD has suggested that employers who are transparent about the pay levels of their staff will have better employee relations as continuing secrecy over pay is linked with poor ambiance at work.

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The survey questioned HR respondents on how they rated employee relations in terms of very goodgood, somewhat strained or very strained with 50% of respondents admitting their relations as good, one in eight describing it as strained and one in twenty as very strained.  

The survey also asked employers to rate the extent to which they were open about pay, with the result being a “secrecy score” between 0 & 5. Researchers have highlighted that there is a direct correlation between the two.

“Our results show a direct relationship between the extent of pay transparency and the quality of the employee relations climate,” the report reads. “The more secretive an organisation is about pay, the more strained the ER climate. This result has implications for organisations, not only in light of recent legislation to encourage more pay transparency, but also in terms of the potential positive effects of being more open about how reward decisions are made and implemented in organisations.”

However, it added: “We do need to be cautious about causality here. The results do not tell us whether the negative ER climate leads to the imposition of pay secrecy or whether the pay secrecy leads to a difficult ER climate.”

Topics: Employee Retention