Welcome to our new series, The Work Diaries – a space for you to share your experiences, advice, stories about bad bosses, crazy colleagues and wild workplaces. We’ll be hearing from industry experts giving practical advice about how to navigate tricky waters in the workplace, alongside Capsule readers (You!) sharing your firsthand experiences of failures, successes and difficult situations you’ll still trying to get your head around.
If you have a topic you’d like to discuss, share your thoughts, experience or advice about, drop a line to [email protected] with ‘Work Diary’ in the subject line. All stories that are published will win a Dermalogica BioLumin-C Moisturiser, valued at $119!
This week we hear from three women who completely changed their opinions of their workplace when they discovered – quite by accident – how much their colleagues were earning. Salaries are most often shrouded in secrecy, so we look into why this is, if it’s actually legal to share with your colleagues what you’re earning, and whether you should!
Natalie had been working at one of New Zealand’s biggest wine and spirit companies, in a sales-based role for three years when a new guy came into her team. He was doing the exact same role, with the same sort of customers and responsibilities, they both had a University degree (hers a double major in Marketing and Science, his in Art History) and were the same age.
So, Natalie was shocked when she opened her email one day and looked at her pay-slip, only to discover she’d accidentally been sent the wrong pay-slip. And, worse still, that pay-slip was for her new co-worker – who despite doing the exact same job with the same experience, was being paid a full $10,000 more than her.
“I was completely in shock,” says Natalie, who contacted her manager and the HR manager to query the disparity. But she was even more shocked when they were less worried about the fact that there was a substantial difference between the two salaries than they were about finding out how she knew about it.
“My manager basically said, ‘Well, that was what we had to pay to get him,’” says Natalie. “So I responded, ‘Well, that’s what you have to pay to keep me.’ And the response from the HR Manager wasn’t around an explanation as to why there was a difference of pay or anything like that, they just wanted to know how I had found out that he was getting paid that amount. It was literally their biggest concern.”
The fact that the company cared more that she might have told her colleague how much she was paid, than the fact she was paid unfairly, understandably left a bad taste in Natalie’s mouth. The company did eventually end up increasing her pay to match her colleague’s salary (even though she felt that really, she should have been on more given she had three years of additional experience) but the damage had been done. “I didn’t stay for long after that as I felt the whole experience had shone a new light on the company and what their values were, with particular regards to how they treated female staff.”
“I know that pay rates can be a sensitive topic and are hidden under a cloud of secrecy, but that’s why I think it’s important the companies have transparent salary bands/brackets,” says Natalie. “I don’t need to know what my colleagues are getting paid, but I would like to know that it’s in the same ballpark as me if we are doing the exact same job.”
Rachel also went through a similar experience, after working at a small family company for two years before it was bought out by a big, international company. She’d been on a modest salary, but because it was a small company, run by a husband and wife in a little office they’d built in their backyard, she hadn’t minded too much. But now that she was at this massive company, she asked to have her salary reviewed when her contract was renewed with the new owners. After all, now she had extra costs involved, like shelling out for parking or transport in the CBD each day. Her old boss had bought coffee for them each morning and catered lunch every Friday.
“They said they only did pay negotiations at the end of the year so would revisit it then,” she says. “It was February, so it felt like a ridiculously long time to wait! But I didn’t push back because, well, I was young then and I also just felt like I’d got lucky landing the job in the first place, and now that it was for this massive company, I had a bit of imposter syndrome!”
So, when it got to December, Rachel spent a good chunk of her weekend going through what she’d achieved for the company, making a case as to why she deserved a substantial pay increase.
But on the Monday morning, before she could email her boss to set up a meeting, she instead got an email from HR that changed everything. Rachel had a team of three working under her – two who had come along from the old company and a third who had transferred internally after the original team member resigned, right before they moved over. The email included proposed annual pay increases for her staff and for the first time she saw what that third team member was being paid.
“I just assumed she was being paid the same amount as the person who they replaced,” she says. “But no, she was being paid $15,000 more than me! It made my blood boil! She reported to me, had significantly less responsibilities, worked shorter hours and had less stress… yet they were being paid so much more than me! I was wild!”
She was being paid $15,000 more than me! It made my blood boil.
Feeling completely livid, Rachel immediately asked for a meeting with her boss, saying she was extremely disappointed to discover that for the whole year she’d been working for significantly less than a person with less responsibility than her.
“My boss’s response was literally, ‘Ah, I knew it was just a matter of time before you saw this and we had to adjust it.’ I was disgusted. It was like they had completely taken advantage of me and were just waiting until they had to do something about it.”
Her boss offered her an increase that was “completely unheard of” to match the other employee – but Rachel wanted (quite rightly) to be on more than the person who reported to her, plus she wanted to be back paid.
“It went on forever and in the end they offered to pay me $2,000 more than her moving forward, but wouldn’t budge on the back payment,” she says.
“I could never take that company seriously after that. It just showed they really didn’t give a shit about their employees or whether they felt valued, they just cared about money.”
Alex felt the same way about her job after her colleague messaged her one weekend to tell her something wild had happened. Alex had gone home at 5.30 on the Friday because it was her partner’s birthday, but a big group of her colleagues had gone out for drinks. One thing led to another and the CEO’s executive assistant had wound up telling everyone what everyone else was being paid. By Saturday afternoon, most of the people who weren’t even at the drinks knew all about it – and on Monday the EA was “on leave”.
“There was basically a queue for HR,” says Alex. “There was a huge difference in what so many of us were being paid, with really no rhyme or reason to it. I remember ending up actually feeling particularly sorry for one of the guys. It was mostly women, and he was being paid SO much more than most of us – despite being one of the least qualified. He was totally mortified and wanted it to be put right. It was insane how misogynistic it revealed our company to be.”
Natalie, Rachel and Alex’s stories are – unfortunately – all too familiar, particularly when you’re talking to women.
There is such a culture of secrecy when it comes to pay in New Zealand, with most colleagues and friends more comfortable talking about a break-up, divorce or family drama than talking about what they’re being paid.
This is all despite the fact that in NZ the Privacy Act doesn’t require Kiwis to keep their salary secret. But of course, some employers do formalize this sentiment and do actually have it written into contracts that these conversations can’t take place, so if you’re reading this, thinking ‘screw it! I’m going to talk to all my colleagues about our pay!’, you should definitely check the fine print of your contract.
Many employers introduce the clause into contracts for fear of having some tough conversations with employees about why some of them are on higher or lower pay rates and their justification for doing so. Some worry that these conversations will be too tricky and leave employees feeling discouraged and more likely to start underperforming.
There’s also those employers who know that there’s a great benefit to keeping everyone in the dark – keeping pay rates shrouded in secrecy generally means they can get away with paying their employees less.
But, in reality, they’re not only doing a disservice to their employees, but they’re also introducing some far-reaching consequences to their business.
A joint study by Elena Belogolovsky of Cornell University and Peter Bamberger of Tel Aviv University showed that not only did pay secrecy result in wider gender wage gaps and various other forms of pay discrimination, but it was actually tied to decreased performance levels.
It’s a sentiment that was echoed by a report by Middlebury College Economics Professor Emiliano Huet-Vaughn who found that when participants were shown their earnings and where they stood in comparison to others, they generally began working harder and showed increased performance levels.
Rachel says that in her latest role, her contract includes a clause about privacy, but she instead decided to do her research and stand firm when negotiating her original salary.
“This time, I talked about pay in the first interview and then, when I was given the contract to look over, I asked what the median salary was of all staff reporting to me. I also asked for the salary band of other managers in the company with similar responsibilities to me and then had a little discussion about their reasoning for my pay offer.”
“I was really impressed because they weren’t awkward talking about it and could say, yes, there are managers on less than this, and yes there are managers on more – those managers have worked for this same company for 10+ years, or have X many years more experience and another has a PhD. It felt like they were keeping my pay in line with what was fair, not what was the cheapest they could get away with!”
“I’m a lot more comfortable with talking about pay now, and I wish that it wasn’t so taboo. The fact that it is so taboo – particularly in NZ – is only leaving us disadvantaged!”
What do you think?
Have you been in a similar situation? Have you found yourself in trouble for revealing your salary? Or have you experienced something different in the workplace altogether that you think we should be talking about? We want to hear from you! Email us at [email protected].