In a groundbreaking experiment, Pimlico Plumbers asked all employees to share their salary details with others in the organisation. Like in most British companies, salary levels had been kept secret, so what is the impact on workers about sharing their pay. Is this a good idea to boost engagement levels or to address equal pay issues?
Initially, after hearing the pay levels, there is shock for those seemingly significantly ‘underpaid’. Some newer employees are brought in on salaries higher than those loyal to the company over many years – the market rates changed but company increases haven’t kept pace. There are also huge differences between teams in the organisation with tradesmen on salaries up to four times higher that their support teams in the office who have different skills and different pressures. The background is a similar story to many other British businesses.
As there is no money available to simply raise the salaries of those who are underpaid, how would workers seek to address imbalances? A pay team was set up consisting of employees who will look at ways to renegotiate salaries and create a fairer system. What is impressive are the negotiation, problem solving and collaboration of many of the workers, especially some working in the ‘lowest skilled’ jobs. Amazingly, some workers are willing to offer some of their salary to others who earn less than them. People discuss the business case, expected stresses, responsibilities, individual performance and relative contributions to the business to find a better outcome. But is this really a good idea for engaging all workers? Is it fair to ask the better paid people to have a salary cut? Some simply feel they deserve more than others based on their previous experiences.
Initially, few of the senior workers are willing to lower their salaries. But personal values, sense of fairness and teamwork drive a change in senior manager behaviour and outlook. The creativity and teamwork of some staff to identify ways to cut business costs to help raise the money to create fairer salaries would impress managers in many organisations. Once a series of solutions are found, the CEO seeks a vote from all workers to ensure that everyone is happy with the changes being made; all vote in favour. The CEO sees a happy workforce and decides that, in future, all salaries will be published on an ongoing basis. An impressive outcome given the change hasn’t cost the company a significant amount.
The case study demonstrates how pay and reward can affect the motivation of some workers more than others and how difficult it can be to agree what constitutes a ‘fair’ system of pay. Although the behaviour and attitudes of people clearly positively change, it could be a high risk approach to tackling reward problems. Such a review should ensure there is external benchmarking to ensure market rates are paid. A longer term reward strategy needs to be put in place which could cost the organisation more money in the medium. A review of the way that performance is managed would also be needed.