This paper is aimed towards highlighting the phenomenon of pay secrecy and the changing trends in compensation management that propose pay transparency. In the light of the research, solutions will be presented for the case in question.
‘When salaries aren’t secret’ written by John Case for the Harvard Business Review, presents a rather complicated situation that was being faced by the management of a fashion retailer called RightNow! (Case, 2001). The CEO Hank Anderson was facing the retaliation of an ex-employee who had overheard the management discussing employee payment in a meeting and had probed into the company data to find out blatant discrepancies. Displeased with the inequity, she not only resigned but also gave a departing gift to the company, making the individual employee payment amounts known to all through an e-mail to the whole workforce. This had caused a lot of mayhem as many employees discovered they were being paid only a percentage of what their counterparts were being paid. Many demanded a raise and threatened to leave the organization. The CEO was accompanied by the Vice president of the company, Charlie, and CFO, Harriet, to discuss this situation. The furious employees had been seen discussing nothing but the revealing e-mail all day and the management had their share of concerns. They discussed how the situation could be manipulated to give a bad name to the whole organization and its practices, publicly. Their concern was also the height of retaliation that could result from the angry and heartbroken employees who had been exposed to the harsh truth. The vice president gave an instance of three highly paid male employees in an all-female department as possible grounds for a gender discrimination suit. The trusted advisors of the CEO, Hank, present their concerns and possible solutions to the problems namely, sympathizing with the employees, listening to their pleas and demands and promising