Abstract
Orientation: Pay transparency is a controversial but understudied topic. The emerging research is developing theory and exploring the impact on organisational outcomes; however, our understanding of employees’ perceptions of and responses to pay transparency is limited. Research purpose: This research study aimed to explore what employees understand of the term ‘pay transparency’ and how they respond to it. Motivation for the study: This study contributes to a better understanding of how employees in South African organisations perceive pay transparency. Research approach/design and method: Semi-structured qualitative interviews were conducted with 20 employees of four organisations with different pay transparency practices. Thematic analysis was used to analyse the data. Main findings: Employees in this study have diverse understandings and views of pay transparency and relatively low expectations of employers. However, they can thoughtfully conceptualise the potential risks and benefits of greater pay transparency. The metaphor of the sport fan is useful to explain this phenomenon – standing at the side-lines with strong opinions but removed from the action. Practical/managerial implications: Understanding how employees perceive pay transparency can help employers and practitioners to navigate their pay transparency approach. Contribution/value-add: As the only known qualitative study in the pay transparency field, this study gives unique insights into employees’ perceptions of and responses to pay transparency.
Highlights
Pay transparency is often seen as a controversial topic (Birkinshaw & Cable, 2017)
Because the limited pay transparency literature tends to focus on the benefits and costs of pay transparency, these ideas were sought in the interview data and are described under the theme ‘people can conceptualise the benefits and risks of more pay transparency.’
The rest of the codes and categories were inductively analysed, with themes emerging from the data, an approach aligned with the understudied nature of pay transparency
Summary
Companies that have disclosed information about what employees earn frequently make headlines (Loudenback, 2017), and some argue that the prevalence of online salary sharing tools such as Glassdoor.com will make pay transparency something that younger generations will expect of their employers (Marasi & Bennett, 2016). This trend has naturally made some employers and human resource (HR) practitioners nervous that greater transparency could expose pay inequalities, cause reputational damage or increase costs (Zenger, 2016). It is best thought of as a collection of practices (process, outcome and communication practices) that together create an organisation’s approach to pay transparency (SimanTov-Nachlieli & Bamberger, 2020)
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