#012 Simplify Your Salaries
Why do we keep money-talk behind closed doors?
Unfortunately, we live in an age where money makes the world go round.
In order to sustain ourselves, most of us therefore need to work to earn an income. Yet, when it comes to conversations about salaries — that is, the compensation you get for giving your time and energy to an organisation — it’s often something that happens awkwardly and unfairly.
Power and privilege affect the way different people approach conversations of money, and this leads to different outcomes.
It’s a well-researched fact that right now, on average, women earn 13.9% less than their male counterparts.
It’s a less-researched fact that here in Australia, there’s signs of a similarly sized gap for people who aren’t white.
While there’s been heightened media attention over the past years about women earning less in the workforce, there’s little awareness or data that interrogates how different intersections of race, class, sexuality and gender influence how many dollars end up in someone’s payslip.
So, what’s the big idea?
Part of the problem is the “taboo”-ness of the topic. It’s seen as poor form to compare pay with colleagues, or openly in an organisation.
But without a shared understanding of how your organisation values the people that work there, it hard to know if you’re getting a good or bad deal compared to others.
Even if we take equality out of the picture entirely, pay discrepancies between different positions can cause anxiety, self-doubt and stress for an individual and can also lead to some funky team dynamics.
Having worked in a role where I discovered my male counterpart was earning over 50% more than me, I can tell you that motivation and respect for an organisation go pretty quickly out the door.
On the other hand, I’ve also worked in a role where all employees were paid equally, with small adjustments made to account for the cost of living in a place. And I cannot tell you how much of a weight that lifted off on my mind, along with countless team money-related discussions.
Even without going as far as equal pay across the board— there’s a lot that can be improved when it comes to work and money conversations.
Here are some ideas.
Getting Started
How does your organisation decide who gets paid what? Perhaps it comes down to budget, perhaps it comes down to the going market rate. For emerging and under-valued roles — both can be problematic.
What some organisations have tried instead is coming up with an objective way of measuring the value of different roles across different functions.
Take Buffer for example, a social media management platform.
Since about 2014, they’ve adopted an open approach to salaries with the following formula:
Salary = job type X seniority X experience + location (+ $10K if salary choice)
Over the years, they’ve refined it to set figure per role and level (based on third party averages) multiplied by the cost of living in a given area.
Another place that’s great at sharing salary information?
The government.
Here in Victoria, each role and level of role is codified and allocated a particular pay band. Unlike the tech-savvy folks at Buffer, this is outlined and open to view in a 363 page document here.
While how these organisations reward “value” may differ from what you or I might consider valuable, they’re at least making it easy to understand the rules of the game.
So how do you get started in your own organisation?
- 🤔 Step One: decide upon an objective way of measuring value in your organisation. This could mean valuing everyone equally, or valuing people in line with certain functions and average market rates. You might need to adapt it for certain factors like cost of living in different areas too. Whatever you decide, codify it and stick to it.
- 👀 Step Two: run an audit of your payroll to identify if there are any gaps or discrepancies in the way you’re compensating your team. If there are, here’s an introduction to how you might go about changing that.
- 💬 Step Three: change the conversation, or more accurately, encourage the conversation. Pay equality comes from people understanding how they’re being valued in a way that’s fair. Share the methodology of how you’re working this out and share it with potential employees. The more upfront we can be, the better the conversations we’re going to have.
Conversation Starters
If you need some ways to open the conversation with peers, seniors or even your own internal dialogue, here are some things you could ask:
- How do we value certain roles in our organisation?
- What roles hold the most value (through different lenses — not just financial: community impact, team happiness and wellbeing, regeneration, for examples) in our organisation?
- Through what lenses are our team different? How do we ensure pay isn’t distributed unequally along these lines of difference?
Going Further
Simplified or codified your salaries? Great! There are many other ways that dollars can be used for empowerment in an organisation — some of which I’ll talk about in future posts. Some areas for further investigation could include:
- Profit-sharing or ownership-sharing models
- Establishing your own (higher) definition of a minimum wage in your organisation
- Moving to flatten the pay difference between roles in an organisation, and most critically, between executive and non-executive roles (another gap which keeps widening)
As always, if you have ideas or experiences of your own to share in this space, I’d love to hear from you.
If you’re reading this and believe you may be experiencing unfair discrimination through a pay gap, you can lodge a complaint with your local Human Rights Commission, or the Australian Human Rights Commission, who will be able to mediate with your organisation or advise you on what you can do.
Good Work is a collection of bite-sized ideas and resources for organisations wanting to make work, well, more good.
We’re on a mission to catalogue ideas that organisations can use to become more sustainable, healthy and impactful, for both their teams and wider communities.
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