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What is an open salary policy?

An open salary policy is exactly what it sounds like: Everyone's salary is publicized for all to see. Salaries may be kept on a spreadsheet or in an otherwise accessible format, and employees within the organization (and sometimes people outside it) can see exactly what their co-workers make.

What does an open salary mean?

Open salaries mean everyone knows the salary of their colleagues. Self-defined salaries mean the employee can negotiate and rise (or lower :D) his salary. In Speech, the IT company I co-founded, salaries are both open and self-defined. Everyone knows how much everyone gets paid.

What does open range pay mean?

What is an open range salary system? A salary structure with a minimum and maximum value to the pay range for a job. An individual progresses through the range based on performance or equity.

Why do employers not list salary?

The reason employers don't include pay ranges in their job ads is that they are hoping to find an amazing candidate for a low salary. If they posted the salary range in the job ad, they'd have to pay the person they hired at least the minimum of the salary range they had advertised.

How do employers determine salary?

Salary range generally has a minimum pay rate, a maximum pay rate, and a series of mid-range opportunities for pay increases. The salary range is determined by market pay rates, established through market pay studies, for people doing similar work in similar industries in the same region of the country.

Why do companies keep salaries secret?

Beyond recovering from market failure, sharing salaries turns out to help organizations in the long-term. In study after study, researchers have found that keeping salaries secret decreases motivation and performance, and sharing how much people are paid and how that compares to others increases performance.

Why salaries are kept confidential?

The biggest reason for maintaining salaries confidential is to mask the pay differences between those performing the same job. Pay differences also arise between employees who are hired from the market compared to those who have grown to a position from within the organization.

Do companies have to disclose salaries?

If your potential employer asks about your starting and ending salaries, your past employers can provide that information. However, some companies have policies that restrict what information they can disclose. The law doesn't stop them from sharing your salary information, but company policy might.

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