How do you fancy a pay check?

IT consultancy CMG has always had a totally open wages policy: any employee can consult files to see how much their colleagues earn, or what their predecessors took home. Zoe Cacanas reports

Saturday March 1, 2003
The Guardian

Speculation about how much our colleagues earn forms the backbone of working life. But how would we feel if our pay, and that of our colleagues, was laid on the company table?

Employees of IT consultancy CMG don't have to wonder. For the 38 years since its inception, the 3,000-employee company has had a totally open pay policy. Details of all employee salary and performance reviews are nonchalantly filed in the open plan office, with all staff able to come in and scan the records for what their manager, colleague or predecessor earns, and why.

CMG says there's a method to what some employers, and employees, might see as madness. "We start from the principle that there is nothing to hide," says group HR director of LogicaCMG (the company underwent a merger last month), Ian Taylor. "It means that rumours don't get started in the first place."

Instead of spurring rivalry between employees, the system is designed to create healthy discussion where a discrepancy occurs. "In some cases, managers have had to explain that scarce skills have upped the market rate for a job in a particular area. In others, it's about personal performance, and it helps people think more about making their salary reflect their contribution to the company."

But it's not always plain sailing, admits managing developer, Mark Waight: "People sometimes have a slightly different view of their own circumstances and they're totally within their rights to do so. Salaries have been raised as a result of discussion."

Mr Taylor adds that total transparency makes managers think more about giving a rise to one individual, but not to another. "It may be harder for managers because they have to justify their decisions, but it makes them far more accountable."

It seems that having such information readily available may make pay less of an issue. "People talk less about pay, and get down to work instead of trying to guess what others are earning," says Mr Taylor. Review forms are available for people to look at, but generally, people know what, or how well, their colleagues are doing, he explains.

But open pay is not for everyone. Mr Waight admits that although some thrive on the openness, others can't cope and eventually leave the company. When CMG merged with another organisation two years ago, open pay was not automatically integrated.

New staff had their reservations and were given time to adjust and sign up to the system. And again, in the wake of another merger, it may well prove that such a level of openness is challenged.

Mr Taylor is candid: "This is a merger between a totally open company and a slightly less open one," he says. The future of the total open policy where pay is concerned is not a certainty for LogicaCMG.

CMG's history of unveiling pay packets to all staff is both radical and rare. It may stay that way, according to Dianah Worman, diversity advisor at the Chartered Institute of Personnel and Development. "In the US they're a lot more open about what they earn, but there's a real cultural issue here in the UK. You just don't talk about what you earn and you keep it to yourself.

"You're either earning more than most and don't want to show off, or you're earning less and feel resentful. And even in the public sector, narrow pay brackets don't make people more open about their pay. They still tend to worry about it."

The pay-shy approach, Ms Worman argues, has led to many private sector employers being able to get away with obscure salary systems, with some even strongly discouraging any discussion of earnings.

According to Mark Good lake, European partner at Mercer Human Resource Consulting, anxiety about pay makes us reluctant to find out more. "Rates in the US are more closely matched to those shown up in pay surveys so people are less anxious. Here, because of unclear grading systems, there's a worry that someone may be getting more than you, and why that's the case."

Although most of us are coy in calling for open pay, others are more resolute. Gail Cartmail, national equality secretary for trade union Amicus, says: "Pay transparency is the goal of the whole equal pay campaign. It shows up unfair pay which would otherwise be concealed.

"We're currently dealing with a retail company where all the men are paid less than the women. Pay transparency would have shown that up, or prevented it in the first place," she says.

This makes the prospect of pay transparency a challenge for companies who may have carpeted unfair pay for years. Sectors such as IT and financial services, which rely on flexible packages to get the right person or set of skills, will be especially reluctant to open up. Organisations that have undergone mergers are also likely to have pay discrepancies. But with calls for clarity on executive salaries and equal pay, the pressure is on employers to come clean.

Transparency may end up muddying the waters and it will also bring discomfort for those who feel they have got a raw deal.

Perhaps this explains our caution. According to Mr Goodlake: "There are different individual toleration levels. Generally though, people seem to want a certain level of transparency but there's a reluctance to go further."

But although open pay may mean some embarrassment, it can leave you richer. CMG says its policy tends to inflate increases as people will use the example of their best paid colleague to work up their own pay.

Having the low-down on what your colleagues and managers earn can leave you with a crucial benchmark when it comes to negotiating a rise. Knowledge can prove to be both power and profit.

For and against: What you told us

Charlotte May
Policy advisor for trade association

I wouldn't mind an open pay system. It would give me some leverage as I'm at the bottom of the pile here. We are quite a closed company in terms of pay, partly because there are only 15 of us. It's also because our pay relates to how the industry is doing when we're hired. It might work better in a bigger organisation.

Claire Madden
Journalist

I used to be a fan of transparent pay as it seemed the only way of stopping men automatically being paid more than women. I didn't understand why anyone should be embarrassed by what they earn. Now I've changed my view. I've recently been temporarily doing a job which I feel ill-equipped for and am obviously less experienced than my colleagues. I know for a fact that they earn at least £10,000 a year less than me, and I feel totally embarrassed by that. It is not the best reason for wanting to muddy the waters around what I earn, but I think there must be so many discrepancies that it will always lead to bad feeling. Transparency would lead to greater fairness, but I'm not sure if the anger it causes is worth it.

Stefano Cestaro
IT consultant

I'd be embarrassed if we went transparent as I think I'm paid more than other people at my level. I get paid more because I'd just come back from abroad where I'd been very well paid and I negotiated on that basis. The company is extremely cagey about pay and all settlements are negotiated very privately. It's company culture never to mention your salary or bonus. Transparency could work if wages were comparable, but if it happened here there would be a lot of gnashing of teeth and door slamming.

Rachel Leigh
Manager in local government

I wouldn't have a problem with my staff knowing what I'm paid. I earn what I'm worth. They are all paid the same rate, but they're also given bonuses on the basis of their performance and those are confidential.

Revealing them would be like passing around someone else's CV. I've worked in the police, where everybody knows what you earn at a certain level. That makes things really straightforward.

Nick Caw
Sales consultant

I wouldn't be comfortable with having my pay disclosed. It's the ultimate measure of how you're doing in your job and it's personal property. What's next? Details on your disciplinary procedures? It would cause conflict, I think, although in a sales environment you more or less know what people get and that's what makes it competitive.

Emily McLaughin
Housing officer for a refugee organisation

Knowing what my colleagues earn wouldn't bother me at all and I'd love to know what my bosses earn. It wouldn't bring any more friction than speculation causes. With the voluntary sector you can tell about how much people earn from the job ads in the papers. There are small pay brackets and it's very structured. That gives us some idea.

Katherine Williams

Works in HR for an insurance company

Transparency wouldn't worry me, as I could justify what I'm paid, but it's extremely dangerous and demotivating if there are people who are overpaid owing to something like a merger. It's very difficult to reduce someone's pay if there's a problem and that would get peoples' backs up.