The share of job ads with salary info increased by 137% in 3 years 

Between February 2020 and February 2023, the share of US job postings on Indeed with salary information increased by 137%, from 18.4% to 43.7%. States with pay transparency laws have ten of the most transparent metro markets in the US. Denver and Colorado Springs, Colorado's two largest metros, are at the top with 77% and 75% of transparent job ads. At the other end of the spectrum are job ads for companies in southern states that do not have disclosure laws. 18 of the 20 least transparent areas were in the south. 

Surprising facts about payroll transparency 

Empirical studies cited by Harvard Business Review suggest that while payroll transparency removes inequality, it can reduce compensation overall. In some cases, it can limit employee productivity and impact an organization's ability to attract and hold on to top talent. It can skew staff members to favor a specific performance aspect, resulting in declining overall performance. The process of achieving transparency is crucial to make sure the company and its employees benefit from it.

Effect of pay transparency on employee motivation 

The movement towards payroll transparency within companies has intensified regardless, and time tracking apps to calculate payment accurately have never been more popular. A 2023 study by the University of South Carolina explored the effect of payroll transparency on employee motivation in settings where pay dispersion was both performance-based and non-performance-based. Researchers found that payroll transparency impacted motivation based on what it revealed about employees' relative standing in the context of equal performance incentives. In other words, it depended on whether the employee was overpaid, underpaid, or their remuneration aligned with their performance. 

The role of unmet expectations 

Obviously, payroll transparency reduces job satisfaction when the person finds out they are underpaid. Study results suggest that unmet remuneration expectations reduce job satisfaction, with so-called “episodic envy” as the mitigating factor. More specifically, episodic envy mediates unmet expectations' negative effects on job satisfaction only for employees with low victim sensitivity levels. Victim sensitivity is a psychological construct that makes people more likely to suspect unequal payment at their organization. Payroll secrecy is making these people anxious that they're being treated unfairly. 

Transparency to counteract unequal pay 

Either way, it's better to know payment is unequal and do something about it than to merely suspect it and worry. In 2021, women working full-time were still earning 84 cents per dollar paid to men. The statistics are worse for women working full- or part-time: 77 cents for every dollar. African American women working full time earned 67 cents for every dollar white men earned, and women of Latin origin were paid only 57 cents. Over a woman's lifetime, the payroll disparity translates into huge losses. A woman working full-time earns $9,070 less than a man working full-time for each year worked. On average, women working full-time are paid a collective $1.6 trillion less per year in the US due to the wage gap. These losses are far higher for women of color. 

An increase in productivity 

Transparency, or some degree of it, makes employees more likely to believe their employer is treating them fairly, increases performance motivation, and reduces dissatisfaction. In a 2022 study, employees who found out how much managers a few promotional steps ahead of them were making worked longer and made more sales. Employees who feel their employer is concealing shady payroll practices in the name of confidentiality become disengaged. 


What are the current salary transparency laws in the US?

Congress began reviewing the Pay Equity for All Act and the Salary Transparency Act last March. If these bills pass, US employers will have to disclose salary ranges for all jobs and will not be allowed to ask job applicants about their salary histories.

What is the best way to motivate employees to perform better?

Be transparent, respectful, honest, and supportive. Give employees room to grow and reward them. Share positive feedback and offer flexible scheduling. 

What strategies can you use to engage employees effectively?

Promote transparency, give out employee surveys, carve out career paths, uphold core company values, recognize top performers, allow for honest feedback, and hold employees accountable.