When Salaries Aren't Secret

Case Summary

The RightNow! – a young women fashion retailer has faced a problem about the employees’ salaries was unexpectedly published, which includes many differences between employees who were in charge the same jobs. Everybody was concerned a lot about on which factors the company based to offer the salary for employees. Is it upon their own performance or anything else?

Harriet - CFO and Charlie - VP President HR discussed with Hank – CEO about the solutions for this issue to keep their employee motivated and focus on contribute for the organization. Charlie would like to disclose the salary in organization to keep employees trust and performance, which proved that they are treated fairly. On the other hand, Hank disagreed that it would be impossible to justify why this employee’s salary was less than others in the organization. Harriet is in the same point of view with Hank that they are the private sector business, so it should be quite different.

However, Hank intenede to follow Charlie’s idea due to its productiveness but also has some consideration about its negative effects may cause.

Case Analysis

In this case, there are two main arguments regarding to the salary that should it be kept private or not?

Actually, many people would prefer their salary kepting privately while others would like to disclose it publicly in the organization. The explaination for keeping salary confidential is that organizations could perform more effectively in their management aspect and try to avoid panic among employees. This way is traditionally applied widely in many organizations these days. On the other hand, a open salary system also bring some benefits. Specifically, salary disclosure can prove a fair treatment between employers and employees, which can result in a culture of trust and