Blog

November 17, 2016
Why Discussing Salaries With Co-Workers is a Bad Move

You’re out to lunch with a work buddy and you start talking about the upcoming merit cycle. Given you play similar roles in the company, you decide to compare notes on your salaries. 

Smart move, or bad call?

Sharing salary information isn’t illegal - no employer can stop you from discussing your compensation if you elect to do so. While most companies would prefer you didn’t for a host of reasons, to try and stop you from talking about it would be a violation of the National Labor Relations Act. (What’s that, you ask? Simply stated, it was created to give employees the right to discuss their work conditions.) Some companies actually go so far as to create extreme transparency by making their entire employee population’s salary information public. Let’s assume your company is not that bold.  

Ok, so now we know sharing isn’t verboten. Regardless, read on to understand why this practice isn’t a great idea. 

YOU MIGHT OPERATE AS A TEAM, BUT YOU ARE STILL AN INDIVIDUAL

Back in the 90s, the cast of Friends made major news because they refused to sign their contracts unless each of the six ensemble members were paid exactly the same. Even though an actor or two was seeing a stratospheric rise in popularity (hello, Jennifer Aniston), they believed the show wouldn’t be the same without the collaboration between the entire group. 

That was an amazing act of solidarity. And yet, that is not typically how businesses operate. 

Companies do their best to balance your skills with other key factors, like the impact you make, your attitude, and your aptitude. They pay accordingly for that. So while you might look around your team and assume everyone is equal, you just might find that your value is more on par with a Ross than a Rachel. Conversely, you might just find out you are making signficiantly more than your friend. 

Either way, if you value each other as peers, this can leave one or both of you in a really awkward situation. 

UNDERSTAND THE DATA

While they may keep the overall data confidential, most companies have compensation experts on staff who can walk you through the salary data associated with your particular job. Why is this important? Just because you have a certain title doesn’t mean all roles are created equal. 

For example, my title might be Chief People Officer, but that doesn’t mean I should be making the same amount of money as someone with the same title at a significantly larger and more complex organization.  It also doesn’t mean you should be making what I make if you share my title along with your two years of experience in a 10-person company.

Asking an authority who has real information to share is way more reliable than looking up your title on a pay website, or asking a colleague at another company. Context matters. 

STOP COMPETING

Everyone is different. The reason you see ranges in salaries is because people are often at different places in their role, and that needs to be acknowledged. 

Let’s assume a fantastic technical person is promoted into an architect role. Does that mean she should start out making exactly what the woman playing the same role exceptionally well for the last two years should be making? Not necessarily, right?

Market data, as well as experience, qualifications, and impact all play a role in determining salary for individuals. You’ll also find that every company has different philosophies about pay, as well as variability based on company size, industry, and a variety of other factors. 

When you are constantly comparing yourself to your colleagues, you stop focusing on your own individual path and aspirations. Determine your best path and growth trajectory, and stop worrying about what your neighbor is doing and making. 

If you are truly focused on adding impact to your team and organization, you will likely be rewarded in kind.  

GOT THE REAL DATA & AREN’T SATISFIED?

Most companies aim to pay fairly, with a goal of making sure you feel compensated for your efforts well enough that you don’t sit around thinking about your paycheck every day. In other words, in a competitive market place, almost anyone can walk across the street to find a job who pays them a little more. 

No one debates that money is important. Otherwise, we would all be doing volunteer work. However, if you balance all the other elements of your current job (opportunity, growth, perks, culture, development, etc.) a few extra dollars often isn’t worth disrupting a great thing. The grass might look greener with a little more money, but if that is your only focus, you’ll likely become disillusioned with your next company too.  

Have an open conversation with your manager, leader, or people strategy member to learn more about your own individual situation. Seek to understand how your company makes compensation decisions, and learn about the ranges for your particular role. Inquire about how to move through the range, and what is valued to help you in getting there. Perhaps it’s a balance of impact, skill, and living your company’s values. Maybe it’s longevity and skills accumulation. 

Every company is different, so ask the questions to truly understand how you are valued. The goal is to learn, understand, and determine your own path to getting where you want to go. You might just find out you are underpaid, which could net you a positive outcome and a path to getting you where you should be.

Compensation is a deeply personal topic. While many companies today aim for transparency on a large variety of topics, sharing individuals’ compensation data publicly can result in more chaos than good. By seeking out realistic data that is specific to your own role, you set yourself up to better understand the process and continue up the money ladder. You just need to be willing to ask. 

Your colleagues at the water cooler might be great “friends” but aren’t truly going to identify if you are an undervalued “Ross” or a MVP “Rachel”. In this situation, learn where you stand and how to get where you want to go with the help of some experts. 

 


Christina Luconi is Chief People Officer for Rapid7. Follow her on Twitter: @peopleinnovator.