Transparent earnings in IT

Transparent earnings in IT

Asking a co-worker for a salary is seen as insensitive and inelegant behaviour. Often, knowledge of the amount of earnings affects the level of motivation of the employee and the steps he takes to ask for a raise. Studies conducted by they show that 70% of people surveyed are in favor of the disclosure of wages. We will present the pros and cons of the solution for the transparency of the remuneration system and examples of companies that use it.

An employee’s earnings should always be the result of his or her skills, commitment and experience. In many companies, there are situations in which there is a significant discrepancy in wages in the same positions. Initially, this knowledge may be confidential, but over time, the information becomes a secret polisinel. This can result in a lack of trust, a feeling of being cheated and anger towards the employer. Thus, the employee has no motivation to work and is not loyal. In order not to lead to such situations, a transparent remuneration system has been created.

Transparent remuneration system-what is it?

This system, properly developed and taking into account the value of these positions, can be a good solution for companies. Its transparency avoids the frustration of many employees and guarantees them cooperation with the employer based on clear conditions. A transparent remuneration system is not about knowing how much x earns, but more about why he earns so much. It is therefore important that the criteria for awarding money to an employee are clearly formulated.

Forks in job ads

Many companies are increasingly putting salary forks in job advertisements. Thus, they suggest that the candidate has a chance of a salary depending on the degree of his advancement in a given position. This way, the applicant knows how much the company can give him, and the employer / recruiter does not have to waste valuable time on rejecting people who are not suitable for financial conditions. The amount of salary is an important issue when looking for work especially by IT professionals. Job advertisements that include salary forks are more popular (up to 70%) among candidates.

Transparency of remuneration

Buffer company presents on the company blog A list of earnings of its entire team. The publication brought many benefits to business, as the number of applications of new job candidates increased by 229 percent. This result can lead to one conclusion: people like clear solutions.

Rules for the award of remuneration

Some companies provide rules for awarding money. Buffer has developed an algorithm:

Their remuneration system takes into account the market value of the position (role), work experience (experience), the option (choice), which consists in receiving an additional salary (it is$ 10,000) or additional shares in the compensation package (giving up the additional salary and obtaining a 30% stake in the package), and the work experience in the Buffer (LOYALTY). In addition, the company for each year worked with them gives a five percent increase.

Buffer has also developed a calculator for potential employees to calculate their future salary. This is an attractive solution for employees who are looking for work on clear terms.

Systematize earnings for remote workers

Netguru is a company that employs many employees remotely. Such a system requires compliance with established rules in order for the persons employed to do their job to the best of their ability. All employees are aware of the financial condition of the company and the remuneration system.

System strengths and weaknesses

The advantage of this system is above all honesty to all employees. This ensures that they are more motivated to work and that there is no unpleasant atmosphere of uncertainty about the level of earnings of other employees. In addition, the use of a transparency system is an example of good organization of a company, which has a very good effect on its image.

The weak point of transparency can be the employer’s doubts whether the salary will not cause him trouble. For example:

  • low amount may deter potential candidates

Indeed, this is an argument against this system, but are you sure? A specialist who “wastes time” on recruitment and an interview, at which he learns that he will get, say, 15% less than in the previous company, may be dissatisfied with this development of the situation.

  • the application of forks in the job offer may cause candidates to want to take only the salary cap, and employees may request a raise.

This may be the case if the employer does not have a fixed remuneration system. Therefore, it is very important to formulate rules for the award of salaries, which are adjusted to the market value of these positions.

According to research conducted by PayScale, 40% of companies declare transparency of earnings. Comparing this with the feelings of employees, 21% of them found that employers provide them with transparency in the rules of remuneration. Transparency is beneficial for both parties. According to PayScale.people believe that they earn less than the market salary of a given position. In contrast, 35% of respondents (who earn more than the average salary for their positions) say that they earn less. Such feelings of employees have a negative impact on the development of companies. 60% of respondents who believe that they earn less than others, intend to leave their current place of work.

What do you think? Do you use such a solution?

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