Transparency has become, in a few years, one of the most coveted aspirations of employees. If we look closely, the new forms of corporate governance are emerging alongside the evolution of democratic aspirations, where collective decision-making (debates, referendums) are increasingly popular.
The debate on salary transparency is exciting to analyze in light of the growing salary disparities, according to Eurostat, in 2020, women in France received a salary 15.8% lower than men. This gap is down slightly from 2019, but is still higher than that seen in the early 2010s. While the culture of secrecy has long been the norm in business, it now seems to be reaching its limits. Employees are increasingly rejecting opacity. As such, 70% say they are in favor of more transparency on pay gaps.
At Alan, we believe that knowledge is power. That's why we decided not to be secretive about earnings and stock distribution (BSPCE). By creating a public pay scale, we saw the opportunity to focus on the right things from the start: making salaries transparent and non-negotiable would limit inequities, jealousies and frustrations while allowing us to standardize our hiring and performance review processes.
Our grid rewards the experience and the level of impact of a team member. Beyond this classification established in a collegial manner, we propose two types of evolution:
Seniority, the longer you stay, the better you get paid
Results, if the performance exceeds the expectations of the level, then the employee may be eligible for a change in level
If the question of "how much do you earn?" burns on the lips of companies, it is important to understand that the policy of salary transparency is part of an approach that goes beyond the sole question of compensation. First of all, there is a question of equality, by encouraging people to go beyond their own limits in negotiations. And a desire to promote career development, by giving everyone the power to influence their own development in a transparent manner. If everyone understands what is expected in relation to their hierarchical level, everyone is reassured (to find out more).
At Alan, this is a direct reflection of the principles we established at the beginning to govern our organization; our "leadership principles". There are five of them, but our pay scale echoes two:
Our principle dedicated to strengthening access to company information ("radical transparency"),
Our principle dedicated to employee profit-sharing ("distributed ownership")
From experience, the way you pay your teams reflects the company's culture and necessarily impacts its employer brand. Therefore, offering the right salary to the right profile on a fair scale becomes a guarantee of attractiveness.
For some organizations, opting for a transparent pay scale can be a significant challenge, as not all companies have grown up in the same soil.
The important thing is that this decision is reflected and justified by the culture. For example, in terms of recruitment, our salary policy has sometimes caused us to miss out on excellent profiles wishing to negotiate their salary. However, there has never been any question of going back on the notion of transparency, one of our founding values, nor on our desire to value impact rather than a market price.
Simply put, our system is like us in that it favors over-achievement rather than negotiating skills. And we know that it is fair to diverse candidates. Even if it sometimes costs us some recruitments, we remain faithful to our system because in the long term it reflects our convictions. Indeed, we are looking for "missionaries" and not "mercenaries".
Transparency may conflict with other rights and values, so trade-offs are sometimes necessary.
Giving information at the right time is crucial. Even in companies where transparency is the rule, timing is still important. At Alan, for example, some sensitive issues are kept confidential, at least for a while, to avoid jeopardizing certain negotiations. This is especially true during promotion deliberations during the bi-annual performance review cycles or when an Alaner leaves the company.
Sometimes it is useful to curb transparency to preserve the integrity of one's teams. Nevertheless, when information is made public, there is no question of doing things by halves: when an Alaner is promoted or, on the contrary, when a promotion is refused, a public document explains the reasons. The same is true when an employee is let go.
This way of working reinforces the feeling of community. It is not the management that disappoints the teams; each employee is responsible for his or her own failures and successes.
Finally, for salary transparency to work, the importance of updating your salary scale should not be overlooked. The value of skills is not set in stone and evolves rapidly. It is essential to keep an eye on the market to avoid the risk of proposing an unattractive salary scale at each level.