Amidst the ongoing discussion over gender pay gaps and confusion over executives’ earnings in Britain, a London company Betting firm Smarkets has just adopted a radical policy to ensure pay transparency among employees. Under the new policy, the company lets its employees to see their coworkers’ salaries and make pay rise requests endorsed by peers.
Software engineer Angeline Mulet-Marquis is among the firm’s staff who received the 12 percent more pay rise she asked for, as can be seen by all of her colleagues on the internal website. In the company itself, it is common to get pay increases of 10 to 30 percent. At Smarkets, recently graduated engineers are paid a salary of around £45,000 (S$72,700), which can keep rising to six-figure salaries for highly qualified senior engineers.
This radical openness in salary policy is seen as a rare move in the British capital, despite London’s reputation as an important hub for start-ups and global business centre, Straits Times reports.
Ms Susana Pinto is the one who is in charge of assessing Smarkets’ biannual pay reviews, through which an employee can aks around five peers for feedback and suggested pay increase that they can take forward to the higher-ups. There will be further talks and comparison to industry data in order to determine the final pay increase, although if the employee is not happy with the result, they can set their own salary.
However, the later move is said to be rarely found, as employees are typically well aware that they need to face their office mates who will know they have gone against their prior advice.
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The initiative is among the efforts to stamp out alleged gender inequality in some British firms. For example, last year the BBC was forced to disclose the salaries of some of its top staff which showed that men made up 12 of the 14 highest-paid posts. This case has led to complaints of unequal pay for the same work.
Despite the success of salary transparency at Smarkets, which has about 100 employees, a number of staff said they were unsure if the same approach would work for large firms or different industries.
Regarding this matter, Professor Jordi Blanes i Vidal at the London School of Economics said that such system would work best in areas such as sales where there are clear markers of performance. However, within a setting in which it is not as easy to justify differences in pay as it has differences in productivity, pay transparency can be very demotivating instead.
Nevertheless, pay transparency is more widely accepted in other countries. In Norway, the tax agency publishes key information online about taxpayers each year, including their earnings and wealth.
A study by the European Commission found “cultural sensitivity” was the most common barrier to rolling out similar pay information rules across the continent, while in Britain the associated costs were the main obstacle.
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