Salary Confidentiality
Salary Confidentiality
(OP)
Hello ladies and gents,
We recently extended an offer to a new EE grad. We work in a small office (6 people not including sales staff who work at a kiosk). Though the new hire will initially be making less than most in the office, we are writing in a pay bump after one year that will have him making more than some people, including technicians who are 20+ years older (though have only worked here less than a year).
When he starts working, I was thinking of just sitting down with and asking him if he would please keep his salary information confidential in the office to avoid any issues. I don't know if I need to go any further than that, but as we haven't written his contract yet, is it prudent to put something in there as well? He doesn't seem like a blabber, but he hasn't started working yet and it's only our second engineering hire.
Just wondering if anyone has any input and experience in the issue. Thanks in advance!
We recently extended an offer to a new EE grad. We work in a small office (6 people not including sales staff who work at a kiosk). Though the new hire will initially be making less than most in the office, we are writing in a pay bump after one year that will have him making more than some people, including technicians who are 20+ years older (though have only worked here less than a year).
When he starts working, I was thinking of just sitting down with and asking him if he would please keep his salary information confidential in the office to avoid any issues. I don't know if I need to go any further than that, but as we haven't written his contract yet, is it prudent to put something in there as well? He doesn't seem like a blabber, but he hasn't started working yet and it's only our second engineering hire.
Just wondering if anyone has any input and experience in the issue. Thanks in advance!





RE: Salary Confidentiality
If you have to sit him down like a little kid and explain in detail everything he should / should not discuss, you should reconsider hiring him for your particular environment.
That said, you shouldn't feel guilty about paying a more capable (but younger) person more money... there's a reason you're compensating this guy more than the other techs, right? If this guy is not more capable, well, then you have a hiring issue that will not bode well long-term for your company. Info will get out, what matters is how the information is viewed by all involved. If you have good-natured people and your choice to offer this guy more money in the long-term was based upon solid logic, it will be a non-issue. If at least one of your employees is not good-natured, well, expect a LOT of turmoil when the truth comes out.
Dan - Owner
http://www.Hi-TecDesigns.com
RE: Salary Confidentiality
RE: Salary Confidentiality
However, the problem was that his older brother also worked for the company, in another city reporting to a different manager (it was from his brother that the guy I hired had even heard about the job in the first place). Anyway, a few weeks later I got an irate phone call from my fellow manager complaining that I should have made it clear that salaries were to be kept confidential and it seems that the guy I hired had told his older brother what he was being paid and it turned out to be significantly more than he was making despite having worked for the company for five years or so. And to add insult to injury, his kid brother was given a higher level job title, Consultant versus Associate-Consultant (which I always considered an entry level position for someone with little or no relevant experience which was NOT the case for the guy I had just hired, thus the level I hired him at). I tried to explain to the other manager that it was naive to think that you could keep brothers from sharing information like that and besides, I had no idea what the old brother made nor for that matter what his exact title was since he didn't work for me and I felt no obligation to double-check salaries that were being paid to people who did not report to my part of organization. I never got into any trouble over this since my boss understood completly and besides I had been told to hire the best people I could find and the salary and title given was well within the guidelines for that position so I was covered, but that other manager never forgave me. It seems he had to promote the older brother and give him a big raise, something he probably should have done years before since he had not promoted his employee from that entry-level position he started at five years earlier, so in the end I never felt sorry for what I did
Anyway, the point is that even if it's formal company policy, you can't really expect people to remain mum about stuff like this.
John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:
To an Engineer, the glass is twice as big as it needs to be.
RE: Salary Confidentiality
Bottom line is that the policies are absolutely unenforceable. You are better off having a talk with him and letting the cards fall where they may.
David Simpson, PE
MuleShoe Engineering
"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"
RE: Salary Confidentiality
I can't really think of a time when someone's salary was the subject of a discussion, unless it was about what we thought a particularly obnoxious manager was making. Generally, companies will have salary ranges for different job grades posted, and that's generally enough to satisfy most peoples' curiosity. Given the unique situation you have with this employee, I think a discussion about the ramifications of revealing his salary should be in order.
People will and can find out, eventually, and there are always soreheads in any sizable group of people. I got lots of negative vibes from a couple of technicians at one job, because I was making more than them, and it appeared to them that I had a cushier job. The difference, of course, was that I was a BSEE-to-be, and they were high school dropouts, but that wasn't ever in their considerations.
TTFN

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RE: Salary Confidentiality
We had a guy here who printed his pay stub on a common printer and didn't pick it up. Most of the people who looked at it (after it was conveniently pinned to the wall), weren't mad about the amount, but that the guy was printing it out at all.
If there is a good reason to pay someone less than someone else, just be prepared to explain it. If they ask, you'll have your case ready. It might be uncomfortable, but it also might be a teachable moment.
RE: Salary Confidentiality
That said, I'll quote my dad from his first day on the job (back in 1938):
Boss: Ralph, we make it a policy not to talk about salaries around here.
Dad: Don't worry, Mr. Merriwether, I'm embarrassed about it too.
Best to you,
Goober Dave
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RE: Salary Confidentiality
RE: Salary Confidentiality
enforcing a " do not discuss your salary.", policy is like trying to herd cats. As both an employee, and an employer, no matter what you say or do about this, sooner or later the information will get out.
If you terminate the leakers, you may find that instead of people you think are just mal-contents, you may find some of your better people involved.
The better way is to post an official attitude of " You are paid what you are worth to the company.", with a note that if you want more, find ways of being more valuable to the company.
B.E.
You are judged not by what you know, but by what you can do.
RE: Salary Confidentiality
RE: Salary Confidentiality
RE: Salary Confidentiality
If you have someone constantly complaining they should be making more, sit down with them, to see if there is any basis in fact.
I got into this scenario with an employer many years ago who essentially told me to put my money where my mouth is. I left his employ and got a job with his next door neighbor, at 50% more than I was making with him.
As an employer I have also lost good employees to other companies. These employees left for the same money, but much better health plans, that I had no way of matching.
With the current health plan turmoil, I can see this happening again.
B.E.
You are judged not by what you know, but by what you can do.
RE: Salary Confidentiality
RE: Salary Confidentiality
Divide and conquer.
What makes the EE new-hire worth more than other employees? When it becomes a struggle to get a fair days pay for a fair days work then it's not fair anymore. I am not big on deal-cutting all over the office. Do the most assertive deserve more than the best qualified? I don't like negotiating, it's not my thing; however, I think that I deserve to be fairly compensated. I believe that a salary review for all employees in the office is in order instead of a gag-order on salary discussion. If the company can only afford to fairly compensate one employee, then something is wrong.
RE: Salary Confidentiality
RE: Salary Confidentiality
In the 1990s I worked for a large engineering company that did the same thing. Each time I prepared a fee proposal, I had to call each person on the project team and ask them how much they made. There were no mysteries and, frankly, no surprises. However, none of us liked it very much. Most other places I have worked binned people into groups (e.g. Principal Engineer, Senior Engineer, etc) with set billing rates.
==========
"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill
RE: Salary Confidentiality
PE, SE
Eastern United States
"If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death!"
~Code of Hammurabi
RE: Salary Confidentiality
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Salary Confidentiality
I don't think I've ever known what a peer made, unless it was by accident or by inference from the contract rate we charged someone. Most of anything else is moot; there's only a couple of people who do anything comparable to what I do in the company.
TTFN

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RE: Salary Confidentiality
Surprisingly enough, the ones you think are making a killing usually aren't. In some positions I learned I was way under budget (leading me to negotiate better the next time around), while at others I learned I was poking through the glass ceiling (which gave me good leverage with the next company).
Dan - Owner
http://www.Hi-TecDesigns.com
RE: Salary Confidentiality
What we notice here is that the "professionals" tend to strictly adhere to the policy of holding salaries and other compensation confidential. The people in our shop absolutely do not, some going to the extent of showing one another not only their pay slips but also their bonus cheques. The professionals are very likely happier without knowing how much each of them makes relative to the other, but I'm not entirely sure they're smarter...
Negotiating salary with your employer is a sort of prisoner's dilemma, in that you usually have neither sufficient power nor sufficient information to negotiate effectively. A salary survey based on sufficient data to be reasonably accurate, combined with an intimate knowledge of exactly what you earn or save for your employer, is invaluable.
RE: Salary Confidentiality
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Salary Confidentiality
RE: Salary Confidentiality
yeah, or the new hire gets a significantly bigger starting salary and after first promotion (from junior) gets a higher pay then an engineer with x years in the office.
RE: Salary Confidentiality
RE: Salary Confidentiality
In theory it all gets levelled out over time bt forced ranking. If you believe that then I have a bride to sell you.
...or a bridge.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Salary Confidentiality
David Simpson, PE
MuleShoe Engineering
"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"
RE: Salary Confidentiality
Over time, following this process allowed you to increase your share of the company's annual raise 'pool' to the benefit of all your people. What was amazing was that some managers went out of their way to pay the absolute lowest salaries possible, even if it meant selecting lessor qualified people, claiming that this is what 'good' managers were expected to do. However, over time these same managers had to continuously struggle with trying to keep their more qualified people as their salaries would eventual lag the people who worked for managers who, like myself, had admittedly been 'gaming' the system. But as a manager I felt it was my obligation to get the most for my people even if it meant that I had to take advantage of a system that could be manipulated to my advantage but which other managers never seemed to catch on as to what was happening or realized how it was hurting them in the long run. BTW, when I was able to get someone a promotion, I would play the same game, getting them the absolute maximum increase that HR would approve and then use their contribution to the raise 'pool' the next time around to help someone else or to raise everyone a bit more than they would have gotten otherwise. If you kept this up, over time it really made a difference.
John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:
To an Engineer, the glass is twice as big as it needs to be.
RE: Salary Confidentiality
RE: Salary Confidentiality
There is one additional component--your salary is fixed by law and to have your salary shift requires a change in classification. In a company, the boss generally has the latitude to apportion his raise budget, individuals getting more than the average raise results in others getting less than the average raise. The "less than" folks tend to feel less valued and can start demonstrating that feeling in bad ways. Confidential salaries minimizes that chaos.
David Simpson, PE
MuleShoe Engineering
Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
RE: Salary Confidentiality
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Salary Confidentiality
This is worth looking at.
RE: Salary Confidentiality
In a related note - there was a period of about 5 or 6 years where there were no new hires in my department (before I started). When they started hiring again, they offered hiring bonuses to new employees. Not huge but once it came out that the new guys got bonuses, there was some complaints from people who were there 10+ years. But that's how the industry changed over those years, I think hiring bonuses are a standard practice now.
RE: Salary Confidentiality
HR: "Oh, let's pause and let me ask you how much lower you might go" -- company F starting salaries are ~$100k this year
interviewee: "I suppose I could drop $15k"
HR: "Oh, I don't think we're going to be able to match that"
So, not every company in Silicon Valley has deep pockets...
TTFN

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RE: Salary Confidentiality
Note that I'm also getting a significantly larger (and also taxable) pension for my 11+ years with McDonnell Douglas, again which I had to start taking at age 65 since it too was a defined-benefit pension. Now my EDS pension was converted years ago into a 'cash account' which continues to draw interest even though no new contributions have been made since EDS sold our company. Now the advantage of this plan is that, like other tex-deferred pension plans such as 401k's and IRA's, you don't have to start taking payments until you reach 70 1/2 so I've got a few years to let that grow (without incurring any immediate tax liabilities) before I have to start making withdrawls.
I guess one thing this all proves is that someone, somewhere must have been doing their jobs since in the end, I'll be drawing pensions from THREE companies which no longer even exist.
John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:
To an Engineer, the glass is twice as big as it needs to be.
RE: Salary Confidentiality
But how would I approach my mates in such an environment?
Btw, I recently talked to a guy who works blue-collar in a huge organization, he knew the wages of many of his mates and told me they discussed these things pretty freely and support each other in gaining better wages. When I worked public service, the wage of everyone was basically public - you just looked it up in a table, and again there's was a culture od supportingo ne another with the little bits and pieces that might add a little something. So I'm pretty sure that as an employee, a culture with little confidentiality is a good thing in the long run.
RE: Salary Confidentiality
TTFN

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RE: Salary Confidentiality
Dan - Owner
http://www.Hi-TecDesigns.com