Why you should know how much your coworkers get paid | David Burkus | TEDxUniversityofNevada
-
0:20 - 0:21How much do you get paid?
-
0:22 - 0:24Don't answer that out loud.
-
0:24 - 0:26But put a number in your head.
-
0:27 - 0:31Now: How much do you think the person
sitting next to you gets paid? -
0:32 - 0:34Again, don't answer out loud.
-
0:34 - 0:35(Laughter)
-
0:36 - 0:38At work, how much do you think
-
0:38 - 0:42the person sitting in the cubicle
or the desk next to you gets paid? -
0:42 - 0:43Do you know?
-
0:44 - 0:45Should you know?
-
0:46 - 0:50Notice, it's a little uncomfortable for me
to even ask you those questions. -
0:50 - 0:53But admit it -- you kind of want to know.
-
0:54 - 0:57Most of us are uncomfortable with the idea
of broadcasting our salary. -
0:57 - 0:59We're not supposed to tell our neighbors,
-
0:59 - 1:03and we're definitely not supposed
to tell our office neighbors. -
1:03 - 1:06The assumed reason is that if everybody
knew what everybody got paid, -
1:06 - 1:08then all hell would break loose.
-
1:08 - 1:10There'd be arguments, there'd be fights,
-
1:10 - 1:12there might even be a few people who quit.
-
1:12 - 1:16But what if secrecy is actually
the reason for all that strife? -
1:16 - 1:19And what would happen
if we removed that secrecy? -
1:19 - 1:23What if openness actually increased
the sense of fairness and collaboration -
1:23 - 1:25inside a company?
-
1:25 - 1:28What would happen if we had
total pay transparency? -
1:29 - 1:30For the past several years,
-
1:30 - 1:33I've been studying the corporate
and entrepreneurial leaders -
1:33 - 1:37who question the conventional wisdom
about how to run a company. -
1:37 - 1:39And the question of pay keeps coming up.
-
1:40 - 1:42And the answers keep surprising.
-
1:43 - 1:45It turns out that pay transparency --
-
1:45 - 1:47sharing salaries openly
across a company -- -
1:47 - 1:50makes for a better workplace
for both the employee -
1:50 - 1:51and for the organization.
-
1:52 - 1:55When people don't know how their pay
compares to their peers', -
1:55 - 1:57they're more likely to feel underpaid
-
1:57 - 1:59and maybe even discriminated against.
-
1:59 - 2:02Do you want to work at a place
that tolerates the idea -
2:02 - 2:05that you feel underpaid
or discriminated against? -
2:05 - 2:08But keeping salaries secret
does exactly that, -
2:08 - 2:11and it's a practice
as old as it is common, -
2:11 - 2:13despite the fact
that in the United States, -
2:13 - 2:17the law protects an employee's right
to discuss their pay. -
2:18 - 2:21In one famous example from decades ago,
-
2:21 - 2:23the management of Vanity Fair magazine
-
2:23 - 2:25actually circulated a memo entitled:
-
2:25 - 2:28"Forbidding Discussion Among
Employees of Salary Received." -
2:28 - 2:32"Forbidding" discussion among
employees of salary received. -
2:32 - 2:34Now that memo didn't sit well
with everybody. -
2:34 - 2:36New York literary figures
Dorothy Parker, -
2:36 - 2:38Robert Benchley and Robert Sherwood,
-
2:38 - 2:41all writers in the Algonquin Round Table,
-
2:41 - 2:42decided to stand up for transparency
-
2:42 - 2:44and showed up for work the next day
-
2:44 - 2:47with their salary written on signs
hanging from their neck. -
2:47 - 2:49(Laughter)
-
2:49 - 2:51Imagine showing up for work
-
2:51 - 2:55with your salary just written
across your chest for all to see. -
2:56 - 3:00But why would a company even want
to discourage salary discussions? -
3:00 - 3:03Why do some people go along with it,
while others revolt against it? -
3:05 - 3:08It turns out that in addition
to the assumed reasons, -
3:08 - 3:11pay secrecy is actually a way
to save a lot of money. -
3:11 - 3:13You see, keeping salaries secret
-
3:13 - 3:16leads to what economists call
"information asymmetry." -
3:16 - 3:18This is a situation where,
in a negotiation, -
3:18 - 3:21one party has loads more
information than the other. -
3:22 - 3:25And in hiring or promotion
or annual raise discussions, -
3:25 - 3:29an employer can use that secrecy
to save a lot of money. -
3:29 - 3:32Imagine how much better
you could negotiate for a raise -
3:32 - 3:34if you knew everybody's salary.
-
3:36 - 3:39Economists warn that information asymmetry
-
3:39 - 3:40can cause markets to go awry.
-
3:40 - 3:42Someone leaves a pay stub on the copier,
-
3:42 - 3:45and suddenly everybody
is shouting at each other. -
3:46 - 3:47In fact, they even warn
-
3:49 - 3:53that information asymmetry
can lead to a total market failure. -
3:54 - 3:56And I think we're almost there.
-
3:56 - 3:57Here's why:
-
3:57 - 4:02first, most employees have no idea
how their pay compares to their peers'. -
4:02 - 4:06In a 2015 survey of 70,000 employees,
-
4:06 - 4:10two-thirds of everyone who is paid
at the market rate -
4:10 - 4:12said that they felt they were underpaid.
-
4:13 - 4:15And of everybody who felt
that they were underpaid, -
4:15 - 4:1860 percent said
that they intended to quit, -
4:18 - 4:21regardless of where they were --
underpaid, overpaid -
4:21 - 4:23or right at the market rate.
-
4:24 - 4:26If you were part of this survey,
what would you say? -
4:26 - 4:27Are you underpaid?
-
4:27 - 4:30Well, wait -- how do you even know,
-
4:30 - 4:32because you're not allowed
to talk about it? -
4:32 - 4:36Next, information asymmetry, pay secrecy,
-
4:36 - 4:39makes it easier to ignore
the discrimination -
4:39 - 4:41that's already present
in the market today. -
4:42 - 4:45In a 2011 report from the Institute
for Women's Policy Research, -
4:45 - 4:48the gender wage gap
between men and women -
4:48 - 4:49was 23 percent.
-
4:50 - 4:53This is where that 77 cents
on the dollar comes from. -
4:53 - 4:55But in the Federal Government,
-
4:55 - 4:57where salaries are pinned
to certain levels -
4:57 - 4:59and everybody knows
what those levels are, -
4:59 - 5:01the gender wage gap
shrinks to 11 percent -- -
5:01 - 5:03and this is before controlling
for any of the factors -
5:03 - 5:06that economists argue over
whether or not to control for. -
5:07 - 5:09If we really want to close
the gender wage gap, -
5:09 - 5:12maybe we should start
by opening up the payroll. -
5:12 - 5:16If this is what total
market failure looks like, -
5:16 - 5:19then openness remains
the only way to ensure fairness. -
5:20 - 5:22Now, I realize that letting people
know what you make -
5:22 - 5:24might feel uncomfortable,
-
5:24 - 5:25but isn't it less uncomfortable
-
5:26 - 5:28than always wondering
if you're being discriminated against, -
5:28 - 5:32or if you wife or your daughter
or your sister is being paid unfairly? -
5:33 - 5:37Openness remains the best way
to ensure fairness, -
5:37 - 5:39and pay transparency does that.
-
5:39 - 5:42That's why entrepreneurial leaders
and corporate leaders -
5:42 - 5:45have been experimenting
with sharing salaries for years. -
5:45 - 5:46Like Dane Atkinson.
-
5:46 - 5:50Dane is a serial entrepreneur
who started many companies -
5:50 - 5:52in a pay secrecy condition
-
5:52 - 5:55and even used that condition
to pay two equally qualified people -
5:55 - 5:57dramatically different salaries,
-
5:57 - 5:59depending on how well
they could negotiate. -
6:00 - 6:03And Dane saw the strife
that happened as a result of this. -
6:03 - 6:06So when he started
his newest company, SumAll, -
6:06 - 6:09he committed to salary transparency
from the beginning. -
6:09 - 6:11And the results have been amazing.
-
6:12 - 6:14And in study after study,
-
6:14 - 6:15when people know
how they're being paid -
6:15 - 6:17and how that pay compares to their peers',
-
6:18 - 6:20they're more likely to work hard
to improve their performance, -
6:20 - 6:23more likely to be engaged,
and they're less likely to quit. -
6:23 - 6:25That's why Dane's not alone.
-
6:25 - 6:27From technology start-ups like Buffer,
-
6:27 - 6:31to the tens of thousands
of employees at Whole Foods, -
6:31 - 6:34where not only is your salary
available for everyone to see, -
6:34 - 6:37but the performance data
for the store and for your department -
6:37 - 6:39is available on the company intranet
-
6:39 - 6:40for all to see.
-
6:41 - 6:44Now, pay transparency
takes a lot of forms. -
6:44 - 6:46It's not one size fits all.
-
6:46 - 6:48Some post their salaries for all to see.
-
6:48 - 6:50Some only keep it inside the company.
-
6:50 - 6:53Some post the formula for calculating pay,
-
6:53 - 6:55and others post the pay levels
-
6:55 - 6:57and affix everybody to that level.
-
6:57 - 6:59So you don't have to make signs
-
6:59 - 7:01for all of your employees
to wear around the office. -
7:01 - 7:04And you don't have to be
the only one wearing a sign -
7:04 - 7:05that you made at home.
-
7:06 - 7:09But we can all take greater steps
towards pay transparency. -
7:10 - 7:12For those of you that have the authority
-
7:12 - 7:14to move forward towards transparency:
-
7:14 - 7:15it's time to move forward.
-
7:16 - 7:18And for those of you
that don't have that authority: -
7:18 - 7:20it's time to stand up for your right to.
-
7:21 - 7:23So how much do you get paid?
-
7:24 - 7:27And how does that compare
to the people you work with? -
7:27 - 7:28You should know.
-
7:29 - 7:30And so should they.
-
7:32 - 7:33Thank you.
-
7:33 - 7:36(Applause)
- Title:
- Why you should know how much your coworkers get paid | David Burkus | TEDxUniversityofNevada
- Description:
-
This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDxTalks
- Duration:
- 07:41
Ivana Korom edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
Reagan Kingsley edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada |