Will More Pay Transparency Ease Workplace Stress or Add to it?

What’s going on:     

According to the latest edition of LinkedIn’s Workforce Confidence survey, conversations about pay transparency and CEO compensation are found to cause varying levels of unease, depending on the size of the company. 

The study found that larger companies (1,001+ employees) experience more stress related to these topics than mid-sized (201-1,000 employees) and small companies (under 200 employees). Overall, 45% of American employees reported that pay discussion is discouraged in their workplaces, and that figure increases to 51% for employees in larger enterprises. Furthermore, 76% of respondents from organizations of all sizes believe the pay gap between CEOs and employees is too wide. 

Why it matters:    

LinkedIn’s findings illustrate the ongoing controversy and stress that surrounds wage transparency and income disparity within companies. Pay transparency can lead to discomfort in the workplace, especially if it exposes pay system inequities. On the other hand, not addressing these equity issues could potentially lead to employee dissatisfaction, which can cause some employees to leave the company, according to Harvard Business Review.  

How it’ll impact the future:    

More research into wage transparency could inspire larger organizations to reconsider their pay transparency policies and executive compensation practices. As pay equity and income disparity continue to be topics of discussion, more companies might feel pressured to address these issues to maintain employee morale, improve workplace culture, and increase productivity.