Salary history disclosure during the interview process

Question

Based on many questions about a potential employee disclosing their salary history, I'm under the impression this is common and a little undesirable.

Would this practice be a little more equitable if the employer disclosed salaries of past employees at this or a similar positions within the company? It could be considered a privacy issue (Especially if only one person ever held that position.), but my guess most employers don't feel obligated.

Does it seem fair to ask what were the previous or current salaries for a similar job when asked to disclose salary histories during the interview process?

Answer 1

I'm not certain what the value is here.

At the end of the day the pay rate any given employee earns is based upon a huge number of factors. Such as:

1. Specifics about the employee including particular skills or groups of skills.
2. The Market
3. The companies ability to pay
4. The amount an individual is willing to accept for the work.

Getting into employee specifics, you might have two people hired for the same named position at the same time where one is paid more than the other. It might be based on length of time in a similar position or it might be that the higher paid employee has a certain skill or history the other one doesn't which increases their potential productivity.

Looking at market factors, this can sometimes be huge. A person hired last year might be making X, but this year the company needs to hire a similarly skilled person but finds them at Y. Sometimes X > Y, sometimes X < Y. If the market is hot should the company upgrade X's compensation? What if the market slumped, should X's compensation be lowered? I can only imagine the howling that would occur in the latter case. Whereas the former case tends to take care of itself.

This leads into a time component. The amount paid to workers for a specific job several years ago is usually no longer germane to the current market rate. It can vary, wildly, in either direction based on forces too numerous to detail here.

About ability to pay, smaller companies often use "soft" benefits to make up for lack of ability to directly compete on salary. Maybe person X decided they'd make 10% less if they could get 3 weeks of vacation instead of the standard 2; or maybe the company agrees to allow them to moonlight. Neither would show up on a standard salary report but it is certainly a factor.

Finally we get to an individuals decision to accept a job at a certain rate. Some people can afford to take much less due to their own financial position and desire for a specific job. Others have larger demands (needs?). Yes, a company can certainly capitalize on this but does that matter to either of the individuals involved? After all it's your personal responsibility to decide what your time is worth prior to negotiating salary.

Ultimately I'm not in favor of disclosing salary. There are too many factors that go into it on an individual basis when hiring skilled workers. Further, it doesn't seem to matter if an individual understands those factors if they believe they are doing the exact same job the other person is and there is a difference OR that the difference isn't big enough. I've certainly been involved in a situation where a 5 year vet was making more than a recent grad only for the two of them to share their salary info. It took about a day for both of them to end up in my office asking for more money. The vet thought he was worth double the recent grad. The recent grad thought he was worth as much as the vet. Nobody was happy.

Now I do have one caveat: unskilled labor. Labor that requires almost no prior knowledge is such that there is likely very little one worker could possibly bring to the table over another. In that situation publishing the salaries should not be a problem.

Answer 2

Many companies - especially the larger ones - have internally published pay scales.

It's common to see things like:

• Payscale 7 (£20,123 - £25,678)
• Technical Grade B (£30,543 - £60,987)
• Clerical 4, point 5 (£19,098 - £19,542)
• Clerical 4, point 6 (£19,487 - £19,824)

Some companies will have a formal system for pay raises - you go up 1 point every year, for example. Others will look at market rates, or where you fit in the company's priorities.

When you are negotiating a salary and a start date, it is acceptable to ask to see the salary grades / bands. These are usually restricted to being viewed by employees, so you're unlikely to get them before a job offer has been made.

It is also possible that you can see previous years' salaries and determine what sort of pay rises you are in line for.

That said - salaries don't always follow a patter. Just because your grade got a 5% bump last year is no guide to whether they will next year.