I watched a documentary last night about a London plumbing firm trying to sort out its range of salaries. (Show Me Your Money, available on 4oD until early August.)
In the programme, the Managing Director encourages all staff to reveal their salaries and then negotiate amongst themselves to arrive at a more equitable distribution.
I am a huge fan of transparent pay policies and think they should be widely adopted. If you can’t justify your salary to your colleagues, and can’t live with the knowledge of what your colleagues are being paid in relation to you, there’s something wrong with the pay distribution. We don’t do it at JKP, but I’m not the boss.
However, there were some things in the programme last night that made me think this particular example is problematic.
- The pay discrepancies in place were, in some cases, shocking, and to me showed an incredible failure of management to allow them to come about. This wasn’t addressed. If your salaries are secret, it’s the responsibility of the company to ensure they are equitable, and the MD had completely failed in this duty.
- There was a case of a new starter in the call centre on £3k more than his colleagues who had been there longer. All but one of his colleagues were women. Coincidence? It didn’t look like one.
- The fact that the most lowly-paid person in the company was a woman working in the canteen came as no surprise. It did surprise me, though, that she was being paid less than the recommended London Living Wage. Again, a total failure of management. Even after the pay increment at the end of the process, I believe this woman was still earning less than the London Living Wage.
- There was no pay review process in place. Pay rises came about as a result of going to the MD, talking about your kids needing something, and the MD giving you a rise. This is not a policy, this is a free-for-all. And, what’s more, it wasn’t even a publicised free-for-all. A portion of the workforce had no idea this happened, so stayed on the same salary for years.
In short, this is no way to run a business and it’s a mistake to use them as an example of innovative business practice.