People are so desperate to keep their salaries secret that they won't even reveal them to coworkers for $125 cash
- You might want to know how much your coworker makes.
- That's why salary reports on websites like PayScale, LinkedIn, and Glassdoor are so popular.
- But, as a recent study shows, we're reluctant to talk about how much we make - even when there's a cash incentive.
We all want to know what everyone else is making - that's why salary reports on websites like PayScale, LinkedIn, and Glassdoor are so popular. Understanding the data on how much your peers earn industrywide is a key part of any good salary negotiation.
But beyond the realm of those anonymous reporting tools, people aren't nearly as keen to discuss their salaries with others. Some workers say they've even been fired for talking about their earnings.
A recent paper from two researchers at Harvard Business School and the University of California, Los Angeles suggested just how unwilling we are to talk about our salaries.
The researchers asked 752 employees of a multibillion-dollar commercial bank if they would be willing to pay money to stop an email informing five of their peers how much they earn, or be paid in exchange for that email being sent.
About 80% of them were willing to fork over cash to prevent the email from being sent. Moreover, 40% said they wouldn't accept $125 cash in exchange for sending the email.
They also found that people are pretty bad at guessing each other's salaries - the average error margin of guesses was 16%. For example, one might believe that their peer makes $80,000. According to the average error found in the study, that person is likely to make as much as $92,800 or as little as $67,200.
Only 27% of individuals in the study, first reported by MarketWatch, were within a 5% accuracy of their peers' earnings.
While it's illegal to fire an employee for discussing their salary at work, there are still serious taboos around discussing it.
"For example, if an employee reveals to a coworker that she gets paid more, her peers may stop treating her well, or if her manager finds out, the manager may deny her a raise," the researchers wrote. Still, the researchers noted myriad benefits for discussing pay - it empowers you when "negotiating salary, switching managers, or searching for new jobs."
Pay transparency has also been cited as a way to fight the pay gap separating white men from women and minorities.
Meanwhile, it seems that the cultural tendency to shy away from talking salary is shifting.
Millennials are much more likely to feel comfortable discussing pay with their coworkers, as Business Insider's Chris Weller reported. A survey from The Cashlorette, a personal finance site run by Bankrate, found 30% of millennials are okay with talking about their pay with their coworkers compared to 8% of those aged 53 to 71.
Tech startups like Buffer and SumAll have all employees' salaries available to view on an internal network, Business Insider's Tanza Loudenback reported. Netflix has transparent pay among top-level employees.
"I'm challenged on salaries all the time," Mackey said. "'How come you are paying this regional president this much, and I'm only making this much?' I have to say, 'because that person is more valuable. If you accomplish what this person has accomplished, I'll pay you that, too.'"
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