OB Assignment : When salaries are or aren’t secret: A Comparative analysis in regard to the Behaviour level of the employees
Case 1: Where Salaries Are Secret
Company under consideration: Kent Builders and Developers
No. of employees under consideration: 10
Kent Builders and Developers is a residential housing developer based in Pune, India. With multiple projects under construction, this multi crore company is one with vast experience in construction and currently employs about 150 people. Given below are the extracts from interviews conducted by our group with 10 randomly picked employees.
Employee 1: Maqsood F. Balasinorwala
The decision to maintain confidentiality of my worker’s salaries was one I made after much consideration. In my previous ventures, some of which were in construction, salaries were kept secret but were known to all informally. When I started Kent Builders 16 years ago, I maintained a strict policy of employee data security. All data related to employees is kept confidential by maintaining encryption of computerized records. Today, I am still satisfied with this policy as worker rivalry increases in case of salary disclosure. Also, bonuses and incentives given to workers sometimes need to be justified to multiple employees to keep them satisfied which results in unproductive time loss. Also, workers are incentivized to give their best since they believe other workers might be earning more. Hence, I am very satisfied with this policy and think it serves the needs of my organization.
Employee 2: Akhil Khambata
Working with this and other organizations, some of which were PSUs, I have experienced both types of policies of salary confidentiality. With this experience in mind, my opinion is that both policies have their own advantages and drawbacks but I would tend to favour salary disclosure. Salary disclosure may breed some level of discontent and resentment within workers but also leads workers to be more open and trust each other which leads to a better work environment.
Employee 3: Pradeep Nagpal
Salaries being secret are, to my mind, fundamental to the policy of a company. Workers, especially in companies where they are working largely in close proximity, need to maintain an atmosphere of goodwill towards each other which is impossible in a case where salary differentiations are known. This would create bad blood among workers and would result in a hostile work environment with confrontations being commonplace.
Employee 4: Saifuddin Poonawala
Never having worked in an organization where salaries are openly disclosed, I cannot compare the 2 easily. But, I think that salaries being known might be better for a company especially in the case of companies with a large workforce with departments where workers are in constant competition with each other such as our marketing department. I believe that employees are mature enough to realize that salary disclosure can be a valuable way to measure one’s performance with one’s peers.
Employee 5: Keerthi Reddy
Position: Senior Manager
Salary disclosure is a harmful practice that harms the organization. Workers seeing cases of salary differentiation will feel hurt and will lose faith in the company. In a successful organization, workers must be on very good terms with each other which is a principle that will be violated here.
Employee 6: Anushil Kadam
Position: Marketing Executive
I think salary disclosure is a good idea in any company. Secrecy encourages rumour, gossip and misinformation. This undermines employee satisfaction and the work environment we are trying to create. There should be a presumption of openness, not of secrecy. Secrecy belongs to the old command and control environment of the traditional hierarchy. Salary openness is the new method of management that encourages confidence among workers.
Employee 7: Dominic...
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