In polite company and at work when we want to avoid conflict, we usually steer well clear of touchy topics such as politics, religion, and money. That's why your employees probably rarely discuss their salaries with each other and you, as the business owner, probably only broach the subject when discussing it with team members one-on-one.
But is there a better alternative to avoiding hurt feelings and resentment over compensation? One Boulder, Colorado-based solar panel company thinks it may have found a better way. Namasté Solar recently told Business Insider about its unusual approach to information about salaries--it tells everyone what everyone else at the company makes. Giang explains the thinking behind the highly unusual policy:
Blake Jones, co-founder and CEO of Namasté Solar, says that all of this information is transparent at his company, and the disclosure means that those in charge of assigning salaries have to be "thoughtful and justify why they're paying one person more than another."
The salary package is no longer between the boss and the employee, but rather between the boss and everyone in the company.
"Usually, salary is an emotional and sticky situation," Jones says. "They have an emotional impact on all of us and in the end, people actually waste more time and energy wondering how much Bob or Jill is making and thinking the worst."
So rather than try avoid discussion of unfair or overblown compensation, which is the approach most companies take, Namasté Solar attempts to cut the problem off at the root by ensuring salaries are fair enough to disclose publically. The approach fits in with the company's larger, radically democratic culture, which includes other unusual policies such as a rule that no employee can make more than twice what others make and a passing all compensation questions through a board that includes employee representatives for approval.
Clearly, this isn't something that would work for everyone (or even most businesses) but the case of Namasté Solar does raise a pertinent question that every business owner could probably benefit from considering.
If all your employees were aware of what others at your company made, how would they react, and if they'd be less than thrilled, what does that say about your company's approach to compensation?