Experience Files

The question of whether to approach employee compensation with secrecy or transparency is a critical one, and every company naturally falls somewhere on this spectrum. It's vital to identify the pros and cons of where your business currently stands, and where you want to be.

There's much debate about whether employers should allow employees to discuss their compensation. Some view it as privileged information, while others advocate for open dialogue. However, it's critical to understand that in all states, laws protect an employee's right to discuss their pay with other employees. Infringing on this right through retaliation can expose you to a wrongful termination lawsuit.

The Pitfalls of Pay Secrecy

While having employees discuss their pay might initially seem to cause stress for management, most problems actually arise when two employees with similar education and experience have different pay rates due to discriminatory reasons, perceived favoritism, or a lack of clear structure.

For instance, if you, as a manager or owner, ever find yourself instructing an employee, "Well, now that I've given you a raise, don't go tell everyone," it's a strong indicator that your compensation system might lack transparency or fairness. This secrecy often breeds resentment and distrust of management.

The Power of Transparency

In my opinion, your employees should be free to discuss their pay with coworkers, period. This transparency can foster a healthier work environment for several reasons:

• Celebration & Motivation: It gives employees an opportunity to celebrate their hard work paying off, and it can motivate others to strive for the same achievements and compensation levels.

• Fairness & Trust: When pay is transparent, it helps alleviate concerns about favoritism and discrimination. Employees are more likely to trust that they are being compensated fairly relative to their peers.

• Clear Career Paths: Instead of fostering secrecy, consider establishing a published pay scale, clear job requirements, and detailed roles and responsibilities for different positions.

For example: (based on no statistical data)

• Crew Member: $15 - $18 per hour - Entry-level production helper.

• Crew Leader 1: $18.25 - $22 per hour - Requires IICRC WRT or FRT certifications, and capability to supervise 2-3 Crew Members.

• Crew Leader 2: $22.25 - $25 per hour - Requires IICRC WRT or FST & HST & ASD certifications

• Crew Leader 3: $25.25 - $28 per hour - Requires IICRC WRT, FST, HST, ASD, and AMRT certifications

• Project Manager Level A: $45,000 salary + 3% sales commission - Manages small projects (e.g., <$15,000) including estimating.

• Project Manager Level B: $65,000 salary + 3% sales commission - Manages mid-level projects (e.g., $15,001 - $300,000) including estimating.

• Project Manager Level C: $85,000 salary + 3% sales commission - Manages large loss projects (e.g., exceeding $300,000) including estimating.

A shift towards greater transparency can significantly alleviate stress and friction associated with employee pay. However, like any major change, it requires a well-laid-out plan to implement successfully.