Tacit traditions have dwindled to a minimum number in the Indian corporate culture today, thanks to the changing leadership attitudes and globalization. While everything from office crushes to quarterly performance metrics of the firm is discussed on the table, there is something that has yet managed to keep its discreet roots intact – payroll transparency.
A survey conducted by the Institute of Women’s Policy Research in Washington last year reveals that over 50% of employers consider wage discussion inappropriate. The problem behind payroll transparency is global and not restricted to Indian enterprises alone.

Payroll TransparencyIf payroll transparency is put down to the modest form, it simply means ensuring equal pay for equal work and it yet seems to so convoluted when considering active practice. However several start-ups in India have begun to embrace this bold strategy with an aim to bring in a more cohesive corporate culture.

The benefits of enforcing such an open culture within organisations may bring in goodness in more than one way.

Drives away inequality

Making salaries transparent drives away different forms of adversities such as gender inequality, favouritism and nepotism. A survey conducted by Monster India earlier this year revealed that women employees who start out on similar salary packages as that of men in due course earn 27% lesser. The distant dream of gender equal wages can be achieved only through a transparent wage system.

Organisations along with revealing the salary bands may also come up with salary formulas that analyses every aspect of employability. This helps employees understand the position they hold and gives them the ability to negotiate their own.

Attracts the right talent

Salary transparency is a tool in the hands of freshers to choose one organisation over the other. That does not however necessarily mean that the best talent goes into the highest paid jobs. For instance, the average monthly salary for software engineers in a tech start up in India ranges between 15K and 25K depending upon geographical location. IT giants pay the same with maybe slight variations in benefits. However the start-up with more transparency in terms of salary, culture, work and technologies employed promises a better take off.

Builds a culture of trust

The Bangalore based start-up Frrole had its persevering CEO Amarpreet Kalkat come up with founder salary figures and equity details in late 2014. When asked about taking the highest stand on transparency, Mr Kalkat said that he strongly believed that such revelations are seeds of trust sown deep into the organisational culture. “It does not just gain the confidence of employees but also inspires customers and stakeholders to be a part of the open structure of business”, he said.

At the end of the last quarter of 2014, the co-founders were found to be drawing 12 LPA each. The ratio of the salary split up and the comparative study of quarter performance were also given. Employees thus know what exactly their company is making, how their management is profiting and also evaluate what they hold to get.

Enables high employee retention

Pay scales and benefits are one of the major reasons for people to quit their jobs. With closed salaries the inability to compare and analyse the offerings of a company in any market becomes difficult. When a transparent salary structure is enforced, employees understand their position in the organisational framework.

A fresher who chooses a start-up with salary transparency is in a better position for self-improvement, self-awareness and understands the tangent along which he or she must travel to attain higher positions. This in turns brings to light the suitability of the job profile for prospective employees.

Salary transparency fosters competition and increases the tendency to evaluate job suitability among the young crowd. SumAll, a data analytics firm is an open enterprise that claims transparent salaries have enabled its employees to understand their distinct contribution towards the success of the firm and also boasts of 95% retention rate.

Delivers better results

Joel Gascoigne, the founder of Buffer, a social media firm which created a buzz by promoting deep-seated transparency at work believes that transparency is the mother of trust and trust begets great team work. Not only did the company witness better results after making its salaries open but was also inundated with resumes from potential employees.

When a fresher who is new to ways of perceiving his journey towards achievement understands salary structures across various levels, it helps him to benchmark performance. Knowledge about wages at higher levels motivates them and gets them thinking along more productive lines. With suspicions removed and motivation riding high, it is only natural for “open” organisations to deliver better results.

Debate between Tyranny and Transparency

India is thus, by far nurturing one of the largest start-up ecosystems in the world. Investments in the Indian start-up sector witnessed a growth of 300% in the first quarter of the year. Experts consider that one of the major pillars behind flourishing start-ups is the move towards transparency.

Making pay-scales discreet in a way makes performance metrics discreet too. Practising transparency in salaries is a definitive action towards redefining the culture of the organisation. It aids in letting employees know their responsibilities and dealing with their inefficiencies in the most prolific way.