Why are companies keen on salary secrecy?

Whether the salary system is open or confidential is a headache for many enterprises at present, which stems from the high sensitivity of employees to the fairness of the system. In terms of human resource management system, the salary system is most directly related to the interests of employees, and employees can feel the fairness best. At present, many enterprises, especially some small and medium-sized enterprises, have chosen the confidential salary system. There are many reasons for their appearance, but their basic starting point is the same, that is, to avoid the fairness of salary system when it is uncertain, so as to reduce the contradiction between employees and enterprises and employees. In these enterprises, the wage secrecy system is a regulation. These rules are instilled in new employees. Don't ask about other people's wages, and you can't disclose your salary at will. Some companies also require employees to sign the system form that recognizes the wage confidentiality clause. If the disclosure leads to internal chaos in the company, they will be fired. These regulations actually prohibit employees from discussing their own or others' salaries in the enterprise. Although people will continue to inquire about other people's income privately, because one truth applies to employees of every enterprise: caring about other people's wages is far more than caring about their own wages, but the wage secrecy system does blur the unfair boundary, and it actually plays an important role here. In principle, a fair and reasonable salary system and system should be open, because: first, an open salary system can provide a clear career development path for every employee in the organization. An effective salary system should not only reflect the performance and post value of each employee, but also let each employee know his own development direction within the enterprise. Through the rising channel of salary, it reflects the space for employees' career promotion, so that every employee in the enterprise can have short-term and long-term goals of career development and encourage employees to make continuous efforts to achieve their goals. At the same time, different series of career development paths within the enterprise are required to be open and transparent to each employee, ensuring that everyone has the right to choose their own career development. It is in the process of comparing and choosing different series of salary rising channels that employees determine their career development goals according to their own conditions, so an open salary system can ensure the stable and sustainable development of enterprises and employees. Second, the confidential salary system blurs the connection between income and performance. A fair salary system should be able to reflect the performance of employees and should be closely linked with the assessment of enterprises. According to the expectation theory in the incentive theory, when employees think that hard work will bring good performance evaluation, which will bring more income (or other returns), they will be motivated to make greater efforts. At the same time, the fairness theory tells us that incentives are not only influenced by absolute fairness, but also by relative fairness. Therefore, in order to maximize the incentive level of salary to employees, employees should understand how organizations define and evaluate performance, and understand the salary levels associated with different performance levels. However, the confidential salary system cuts off the direct connection between income information and performance information, and employees are prone to false feelings, which will hinder the improvement of incentive level. The secret wage system cannot guarantee fair distribution. People tend to overestimate the salary of colleagues and subordinates and underestimate the salary of superiors, so the actual salary gap is narrowed and the incentive effect brought about by the correlation between income and performance is weakened. The confidential salary system can't guarantee the fairness of the procedure, and a distribution procedure that can't make employees clear can't be much incentive for employees. Third, an open salary system can make unfairness easier to find and correct. Publicizing the mistakes of a system will naturally embarrass managers. However, rational managers will see that the open salary system makes the salary system imperfect and unfair, which is conducive to the management to find and correct mistakes and establish a good atmosphere of fair competition within the enterprise. The open salary system not only tells employees that the management salary policy is fair, but also the act of making the salary public itself can increase fairness, because it can provide employees with the opportunity to check the management. Fourth, an open salary system is conducive to communication within the organization and helps to cultivate the trust of employees. As we know, in the organization that implements the confidential salary system, employees can never discuss salary privately, and this kind of private discussion and communication often leads to wrong information, or being deceived by others or self-deceiving. It is in this process of mutual game between employees that the wrong information spreads within the organization and the trust of employees disappears. According to the communication theory, it is the poor formal communication channels that lead to the emergence and prevalence of informal communication in organizations. Because there is no formal communication channel, we have to save the country by curve, so gossip arises spontaneously. The purpose of informal communication is often not to convey information, but to express the feelings of the communicators, so gossip naturally has the subjective color of the communicators, and it is difficult to guarantee its objective authenticity. The confidentiality and competitiveness of the salary system create favorable conditions for the emergence and continuation of rumors in the organization. If we don't provide open and formal communication channels, gossip will continue. If the organization can disclose such a sensitive issue as salary system, it can not only open up a formal and open communication channel, but also convince employees that the organization is trustworthy on other less sensitive issues. Public discussion of salary often leads to higher employee satisfaction than the state of suspicion and anxiety under the salary secrecy system. In addition, if an organization's salary system is fair and just, the disclosure of income will improve employees' satisfaction with income and income gap. Fifth, the confidential salary system will make managers replace performance standards with personal likes and dislikes in salary distribution, thus creating greater unfairness. Organizations should reward high performers, not other clever political skills, so an open salary system can prevent managers from unreasonable control and abuse of power. When the salary level and changes of each member in the organization become common sense, the eyes of the masses are the best supervision of company management. Finally, employees should have enough right to know. Employees' right to know should be balanced with their right to privacy. While making their own efforts for the organization, employees have the right to know the income of others in the organization, because employees can only get information about whether they are treated fairly by comparison. Since various reasons support the openness of the salary system, is it necessary to make the salary system open? Why are so many companies keen to adopt confidential compensation system? First of all, the performance of many jobs in these enterprises is difficult to measure. Due to various factors, it is difficult to measure individual performance in many jobs within an organization. For example, managers in different sales areas often determine their sales to a large extent because of the differences in local consumption levels, consumption trends and sales bases, which does not reflect their personal performance and efforts. In addition, the performance difference is often caused by the system. In this case, it is difficult to guarantee the fairness of the salary system. Organizations often reward the environment rather than performance, which is equivalent to rewarding weathermen for good weather. A confidential salary system can avoid this sensitive problem. Therefore, in the case that the salary system (especially the operational level and technical level) is basically open, enterprises can consider keeping the salary of some positions whose performance is difficult to measure confidential. Secondly, if the performance evaluation system itself is unscientific, unscientific factors will be introduced into the salary system. When this unscientific system is difficult to change in a short time, the open salary system is harmful to the improvement of fairness. Therefore, a fair and open salary system first needs the support of a scientific performance evaluation system, otherwise, it is better to keep the salary confidential. Third, many employees want their salaries to be kept secret. Talking about a person's exact income can be as uncomfortable as describing his private life to strangers, especially for employees with low income and low performance. Open salary will embarrass them, and employees with below-average income account for a large proportion, so it is difficult for any organization to be indifferent to their existence. Employees have the right to privacy, which seems to include keeping income secret. Finally, the confidential salary system can give managers more freedom in income management. Because they don't have to explain all the wage differences. An open salary system will make managers tend to minimize the wage gap and distribute income more evenly. But this is not the case in reality. The performance of employees is not evenly distributed, but tends to be normally distributed, so the wage gap is inevitable. In order to let the management reduce troubles and work with peace of mind, the salary secrecy system is an effective way. Especially for enterprises with very large wage gap, confidential salary system is often a magic weapon in management, so it is not surprising that many enterprises choose confidential salary system. In China, whether the salary system is open or confidential depends on the particularity of China enterprises. First of all, China people's feudal consciousness and small-scale peasant egalitarianism are very strong, so people are more accustomed to big pots. At the same time, the long-term influence of Confucianism has led to the characteristics of China people's good face, and they are not used to openly accepting the income gap. Secondly, the stability and continuity of China's enterprise salary system are not good, and it is often difficult to give employees stable expectations. To some extent, keeping salary confidential can reduce the instability caused by high expectations of employees. In addition, most enterprises in China are in the stage of reform and entrepreneurship, the stability of the salary system is difficult to guarantee, and the salary system has changed greatly. In order to prevent enterprises from being unable to bear the risks brought by the change of salary system, many enterprises choose confidential salary system. Generally speaking, the confidential salary system has its rationality and effectiveness in the practice of salary management, but it only avoids some problems and cannot fundamentally solve them. Therefore, establishing an open, fair and just salary system is the general direction. Author: Peng Zhen Liao Bin (Editor: Zhou Zhengning)