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Is it legal and/or ethical to show employee pay information on a screen for everyone to see?

The scenario:

  • Company wants to increase productivity in an hourly warehouse environment
  • Wants to move to a "piecework" model
  • Pay a rate per piece of "something" they process
  • Example: Employee A processed 500 widgets. They get a 50cents a widget. They make $250.
  • They would make a base rate of min wage + the "piecework" amount.

The employee wants to then post everyone "piecework" amount for the day on a board for eveyone in the warehouse to see. I guess to "motivate" people and foster competition???

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    Legal questions require a jurisdiction. Where is this an issue? May 7, 2020 at 2:51
  • In the USA. Multiple states including CA, NC, NY + PA
    – jmacnc
    May 7, 2020 at 2:54
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    And are they displaying pay or merely the number of pieces (which is a factor of pay, but not pay itself)? May 7, 2020 at 2:55
  • I believe they want to show the $ amount.
    – jmacnc
    May 7, 2020 at 2:57
  • Ethics questions come up a lot here without seeming like the OP has thought through their question. What ethical principal in particular are you concerned this may contradict? Do you think this is unfair in that some can outperform others? Do you think this oversteps on right to privacy? Do you think this shows lack of concern for wellbeing?
    – Myles
    May 7, 2020 at 18:13

2 Answers 2

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So if employees want to share their pay information, this is legal; in fact, to suppress the sharing of pay information is illegal.

IMO, and IIRC from PM Coursework in school... To put into place a model like this is poor organizational management. That concept is how elementary school fundraisers are run, something like a book reading competition, where waste and endangerment are non-issues. Unless this is the utmost unskilled task labor, completion with no aspect of quality, the pay scale leaves no room for organization improvement or knowledge sharing between employees either.

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    Not to mention it can quickly lead to employees agreeing, beetwen themself, on X amount a day as a 100% productivity benchmark while being able to make 2X but having a very strong position in negotioation. Plus it can lead to Work-to-rule or malicious compliance May 7, 2020 at 7:25
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    This answer tells us that it is legal for employees to share their salaries voluntrily, but it does not answer the actual question: Is legal for employers to share the salaries of all employees without their individual consent? Further, the question doesn't just ask about publishing wages, but also about publishing productivity data of individual employees, which is a whole different problem.
    – Philipp
    May 7, 2020 at 11:23
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    @Philipp Re-read the question. The employer is not posting salary information, they are posting a scoreboard of how many widgets each employee is making a day. Whether anyone can derive pay from that information is not the employer's problem.
    – Jack
    May 7, 2020 at 12:11
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    @Jack I read the question enough times already, thank you. This answer still does not answer the question "Is it legal and/or ethical"
    – Philipp
    May 7, 2020 at 12:13
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    @Jack Comments are not meant for answering questions. If that is your answer to this question, please post it as a new answer.
    – Philipp
    May 7, 2020 at 12:23
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Is it legal..

That depends entirely on where you live and work. Google is your friend here.

... and/or ethical.

As long as they are only revealing "piecework" totals - and not base salary - then I'd say it's perfectly ethical. It's completely transparent - it takes something that is a definite and quantifiable measure of productivity and is using it to reward the most productive workers.

In addition, it will incentivize employees. Somebody leaving the shop floor at the end of a week can see that, if they'd matched Bob's work rate, they could have come out with an extra $100. That's giving them a definite and, more importantly, achievable goal. They know it's achievable because Bob just did it.

That's far preferable to somebody sitting behind a desk, plucking a number out of thin air, and saying "you should be able to do 800 of these a week" - that carries zero weight since he/she isn't making widgets all day.

Whether they post the number of units or the $ value makes no difference - everybody knows the unit rate and can calculate one from the other.

For what it's worth I run a few teams and am responsible for assigning annual bonuses from an assigned pot of cash. It's only logical the best performers should get the highest bonus - dividing the money equally is unfair to those who worked their butts off all year. Unfortunately I work in software development where it's difficult to quantify productivity or value to the company (there are ways, but they are either game-able or too subjective - lines of code, bugs raised/fixed etc.). This scheme is a perfect way to both improve productivity and ensure those who do the most work get better rewards.

The only potential problem I see is that, in the rush to churn out as many widgets as possible, quality may take a tumble.

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    In a physical manufacturing environment rush to produce widgets could also have safety implications along with quality risks.
    – Myles
    May 7, 2020 at 18:46
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    You seem to imply that posting base salary would not be ethical. Why not? In most cases, companies try to suppress base salary information to limit the information their workers have to argue salary from, but I've not seen anything that would suggest that it was an ethics thing.
    – Ben Barden
    May 7, 2020 at 19:39
  • Didn't intend to imply that.. i was going to touch on base salary but edited as the answer was getting too long. Possibly not edited well enough if remnants suggest I believe it entirely unethical! I think it's a grey area - ethical in the sense that everything is transparent and laid out bare for all to see. (Of course it's for that very reason , as you've mentioned, that companies DON'T reveal this information). It may not be ethical in the sense that it should be up to individual employees if they want to reveal that information.
    – amcdermott
    May 7, 2020 at 20:49

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