Why you should know how much your coworkers get paid
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0:01 - 0:03How much do you get paid?
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0:03 - 0:05Don't answer that out loud.
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0:06 - 0:07But put a number in your head.
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0:08 - 0:13Now: How much do you think the person
sitting next to you gets paid? -
0:13 - 0:15Again, don't answer out loud.
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0:15 - 0:16(Laughter)
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0:17 - 0:20At work, how much do you think
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0:20 - 0:23the person sitting in the cubicle
or the desk next to you gets paid? -
0:23 - 0:25Do you know?
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0:25 - 0:26Should you know?
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0:27 - 0:31Notice, it's a little uncomfortable for me
to even ask you those questions. -
0:31 - 0:34But admit it -- you kind of want to know.
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0:35 - 0:39Most of us are uncomfortable with the idea
of broadcasting our salary. -
0:39 - 0:41We're not supposed to tell our neighbors,
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0:41 - 0:44and we're definitely not supposed
to tell our office neighbors. -
0:44 - 0:47The assumed reason is that if everybody
knew what everybody got paid, -
0:47 - 0:49then all hell would break loose.
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0:49 - 0:51There'd be arguments, there'd be fights,
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0:51 - 0:54there might even be a few people who quit.
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0:54 - 0:57But what if secrecy is actually
the reason for all that strife? -
0:57 - 1:00And what would happen
if we removed that secrecy? -
1:01 - 1:05What if openness actually increased
the sense of fairness and collaboration -
1:05 - 1:06inside a company?
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1:06 - 1:09What would happen if we had
total pay transparency? -
1:10 - 1:12For the past several years,
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1:12 - 1:15I've been studying the corporate
and entrepreneurial leaders -
1:15 - 1:18who question the conventional wisdom
about how to run a company. -
1:18 - 1:21And the question of pay keeps coming up.
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1:21 - 1:24And the answers keep surprising.
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1:24 - 1:26It turns out that pay transparency --
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1:26 - 1:28sharing salaries openly
across a company -- -
1:28 - 1:31makes for a better workplace
for both the employee -
1:31 - 1:33and for the organization.
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1:33 - 1:36When people don't know how their pay
compares to their peers', -
1:36 - 1:38they're more likely to feel underpaid
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1:38 - 1:40and maybe even discriminated against.
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1:41 - 1:43Do you want to work at a place
that tolerates the idea -
1:43 - 1:46that you feel underpaid
or discriminated against? -
1:47 - 1:49But keeping salaries secret
does exactly that, -
1:49 - 1:52and it's a practice
as old as it is common, -
1:53 - 1:55despite the fact
that in the United States, -
1:55 - 1:58the law protects an employee's right
to discuss their pay. -
1:59 - 2:02In one famous example from decades ago,
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2:02 - 2:04the management of Vanity Fair magazine
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2:04 - 2:06actually circulated a memo entitled:
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2:06 - 2:09"Forbidding Discussion Among
Employees of Salary Received." -
2:10 - 2:13"Forbidding" discussion among
employees of salary received. -
2:13 - 2:16Now that memo didn't sit well
with everybody. -
2:16 - 2:18New York literary figures
Dorothy Parker, -
2:18 - 2:19Robert Benchley and Robert Sherwood,
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2:20 - 2:22all writers in the Algonquin Round Table,
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2:22 - 2:24decided to stand up for transparency
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2:24 - 2:26and showed up for work the next day
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2:26 - 2:29with their salary written on signs
hanging from their neck. -
2:29 - 2:30(Laughter)
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2:31 - 2:32Imagine showing up for work
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2:32 - 2:36with your salary just written
across your chest for all to see. -
2:38 - 2:41But why would a company even want
to discourage salary discussions? -
2:41 - 2:44Why do some people go along with it,
while others revolt against it? -
2:46 - 2:49It turns out that in addition
to the assumed reasons, -
2:49 - 2:52pay secrecy is actually a way
to save a lot of money. -
2:52 - 2:54You see, keeping salaries secret
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2:54 - 2:57leads to what economists call
"information asymmetry." -
2:57 - 2:59This is a situation where,
in a negotiation, -
3:00 - 3:03one party has loads more
information than the other. -
3:03 - 3:06And in hiring or promotion
or annual raise discussions, -
3:06 - 3:10an employer can use that secrecy
to save a lot of money. -
3:11 - 3:13Imagine how much better
you could negotiate for a raise -
3:13 - 3:15if you knew everybody's salary.
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3:18 - 3:20Economists warn that information asymmetry
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3:20 - 3:22can cause markets to go awry.
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3:22 - 3:24Someone leaves a pay stub on the copier,
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3:24 - 3:26and suddenly everybody
is shouting at each other. -
3:27 - 3:29In fact, they even warn
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3:29 - 3:33that information asymmetry
can lead to a total market failure. -
3:34 - 3:36And I think we're almost there.
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3:36 - 3:37Here's why:
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3:37 - 3:42first, most employees have no idea
how their pay compares to their peers'. -
3:43 - 3:47In a 2015 survey of 70,000 employees,
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3:47 - 3:50two-thirds of everyone who is paid
at the market rate -
3:50 - 3:52said that they felt they were underpaid.
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3:53 - 3:56And of everybody who felt
that they were underpaid, -
3:56 - 3:5960 percent said
that they intended to quit, -
3:59 - 4:02regardless of where they were --
underpaid, overpaid -
4:02 - 4:03or right at the market rate.
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4:04 - 4:07If you were part of this survey,
what would you say? -
4:07 - 4:08Are you underpaid?
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4:08 - 4:10Well, wait -- how do you even know,
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4:10 - 4:12because you're not allowed
to talk about it? -
4:13 - 4:17Next, information asymmetry, pay secrecy,
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4:17 - 4:19makes it easier to ignore
the discrimination -
4:19 - 4:22that's already present
in the market today. -
4:22 - 4:26In a 2011 report from the Institute
for Women's Policy Research, -
4:26 - 4:28the gender wage gap
between men and women -
4:28 - 4:30was 23 percent.
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4:30 - 4:33This is where that 77 cents
on the dollar comes from. -
4:34 - 4:35But in the Federal Government,
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4:35 - 4:37where salaries are pinned
to certain levels -
4:37 - 4:39and everybody knows
what those levels are, -
4:39 - 4:41the gender wage gap
shrinks to 11 percent -- -
4:41 - 4:44and this is before controlling
for any of the factors -
4:44 - 4:47that economists argue over
whether or not to control for. -
4:47 - 4:50If we really want to close
the gender wage gap, -
4:50 - 4:52maybe we should start
by opening up the payroll. -
4:53 - 4:56If this is what total
market failure looks like, -
4:56 - 4:59then openness remains
the only way to ensure fairness. -
5:00 - 5:03Now, I realize that letting people
know what you make -
5:03 - 5:04might feel uncomfortable,
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5:04 - 5:06but isn't it less uncomfortable
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5:06 - 5:09than always wondering
if you're being discriminated against, -
5:09 - 5:13or if your wife or your daughter
or your sister is being paid unfairly? -
5:13 - 5:17Openness remains the best way
to ensure fairness, -
5:17 - 5:19and pay transparency does that.
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5:20 - 5:23That's why entrepreneurial leaders
and corporate leaders -
5:23 - 5:25have been experimenting
with sharing salaries for years. -
5:26 - 5:27Like Dane Atkinson.
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5:27 - 5:31Dane is a serial entrepreneur
who started many companies -
5:31 - 5:32in a pay secrecy condition
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5:32 - 5:36and even used that condition
to pay two equally qualified people -
5:36 - 5:38dramatically different salaries,
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5:38 - 5:40depending on how well
they could negotiate. -
5:40 - 5:43And Dane saw the strife
that happened as a result of this. -
5:44 - 5:46So when he started
his newest company, SumAll, -
5:46 - 5:49he committed to salary transparency
from the beginning. -
5:50 - 5:52And the results have been amazing.
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5:52 - 5:54And in study after study,
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5:54 - 5:56when people know
how they're being paid -
5:56 - 5:58and how that pay compares to their peers',
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5:58 - 6:01they're more likely to work hard
to improve their performance, -
6:01 - 6:04more likely to be engaged,
and they're less likely to quit. -
6:04 - 6:05That's why Dane's not alone.
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6:05 - 6:07From technology start-ups like Buffer,
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6:08 - 6:11to the tens of thousands
of employees at Whole Foods, -
6:11 - 6:14where not only is your salary
available for everyone to see, -
6:14 - 6:17but the performance data
for the store and for your department -
6:18 - 6:19is available on the company intranet
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6:19 - 6:21for all to see.
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6:22 - 6:24Now, pay transparency
takes a lot of forms. -
6:24 - 6:26It's not one size fits all.
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6:26 - 6:29Some post their salaries for all to see.
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6:29 - 6:31Some only keep it inside the company.
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6:31 - 6:34Some post the formula for calculating pay,
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6:34 - 6:35and others post the pay levels
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6:35 - 6:37and affix everybody to that level.
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6:37 - 6:39So you don't have to make signs
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6:39 - 6:42for all of your employees
to wear around the office. -
6:42 - 6:45And you don't have to be
the only one wearing a sign -
6:45 - 6:46that you made at home.
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6:46 - 6:50But we can all take greater steps
towards pay transparency. -
6:50 - 6:52For those of you that have the authority
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6:52 - 6:54to move forward towards transparency:
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6:54 - 6:56it's time to move forward.
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6:56 - 6:58And for those of you
that don't have that authority: -
6:58 - 7:00it's time to stand up for your right to.
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7:01 - 7:03So how much do you get paid?
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7:04 - 7:07And how does that compare
to the people you work with? -
7:07 - 7:08You should know.
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7:09 - 7:11And so should they.
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7:12 - 7:13Thank you.
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7:13 - 7:16(Applause)
- Title:
- Why you should know how much your coworkers get paid
- Speaker:
- David Burkus
- Description:
-
How much do you get paid? How does it compare to the people you work with? You should know, and so should they, says management researcher David Burkus. In this talk, Burkus questions our cultural assumptions around keeping salaries secret and makes a compelling case for why sharing them could benefit employees, organizations and society.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 07:29
Aviva Nassimi edited English subtitles for Why you should know how much your coworkers get paid | ||
Aviva Nassimi edited English subtitles for Why you should know how much your coworkers get paid | ||
Brian Greene commented on English subtitles for Why you should know how much your coworkers get paid | ||
Brian Greene edited English subtitles for Why you should know how much your coworkers get paid | ||
Yasushi Aoki commented on English subtitles for Why you should know how much your coworkers get paid | ||
Brian Greene edited English subtitles for Why you should know how much your coworkers get paid | ||
Brian Greene approved English subtitles for Why you should know how much your coworkers get paid | ||
Brian Greene edited English subtitles for Why you should know how much your coworkers get paid |
Yasushi Aoki
you wife -> your wife
Brian Greene
The typo at 5:09 was fixed on 11/27/16. "You wife" was changed to "your wife."