I can't think of a condition that does more to lower employee morale than management having a policy of firing one or two employees per year to "keep the other employees in line". Other egregious behavior from management: employees are disciplined for violation of a rule that they weren't informed of, that isn't in any employee handbook or memo, and is not obvious....
Low employee morale can destroy a company, or in the least cause less growth. Even worse, poor morale can ultimately lead to litigation. In my series on workplace issues, I will be discussing a range of issues related to both business managers and employees. Here is a morale-buster I wish to discuss in today's posting.
"You should never let your co-workers know how much you make." Many people will tell you that their company policy forbids discussion of salaries and a violation is a fire-able offense.
Elana Centor, contibutor to Blog Her, thinks that having an open culture on salary could finally help women close the pay gap. Important in the post Lily Ledbetter Fair Pay Act era. This became law on January 9, 2009. With worker protections under this new law and under the National Labor Relations Act, the NLRA says employers cannot interfere with, restrain or coerce employees in exercising their rights under Section 7 of the NLRA, which protects the employees' right to discuss their "wages, hours, and other terms and conditions of employment" for their "mutual aid or protection." That's right, discussion about salaries is legally protected free speech.
Bob Lambert, managing partner at Christian & Timbers in Irvine, Calif., agrees that firing is not the answer to silencing salary talk. Employees talk. Most generally know what the the guy at the next desk over is making, whether through whispers, cigarette breaks, or grapevines that include former employees--who have nothing to hold them back from talking. Those at a decent education level can understand there's more to salaries than meets the eye if things are explained to them. The answer is communicating management's perspective, educating employees about your company's compensation system, including salary ranges for various job levels. Put employees in charge of their own futures: Workers should understand why they earn what they do- based on such factors as current responsibilities, personal achievement, company performance-and what they need to accomplish to make more. Then, co-workers' salaries will be much less important.
Chief Happiness Officer is a website dedicated to happiness at work. In addition to writing a fantastic book called Happy Hour is from 9 to 5, author, speaker and consultant to large companies such as IBM, Alexander Kjerulf explains why Secret Salaries are a bad idea.
There are three major reasons why secret salaries are silly:
- It frustrates employees because any unfairness (real or perceived) can’t be addressed directly.
- They’re not secret anyway. People talk, you know.
- It perpetuates unfair salaries which is bad for people and for the organization
"And here’s the problem: If Johnson’s salary is (unfairly) higher than mine, and secret, I can’t complain to my manager about it because I can’t admit that I know about it. When a company sets up a situation where people can see the unfairness but can’t address it directly, or even discuss it openly, they’re rigging the system for maximum frustration."
Like Kjerulf, I too believe on a very fundamental level that openness is better than secrecy, in life and in business. There's another author mentioned in this website, with a book called The Seven Day Weekend. This book challenges everything you thought you knew about managing a business. If managers bring openness to the workplace about salaries, complaints are brought out in the open as well. If employees know who is making more than they are, and if there are good reasons, it will serve as a motivator not only to those making less so they have a goal, but also to those making more who have to show to their colleagues that they are worth it. The way to raise morale is for employees to know what factors influence salaries. Are they based on customer satisfaction, hours worked, quality, sales figures, seniority, skills, commitment to the company, education, etc… What matters when setting salaries and what doesn’t matter?
One last note: I wish to dispel the myth that you won't get anything free from a lawyer. While this isn't legal advice, it's nonetheless useful in keeping yourself out of legal trouble. Here is a workbook that I recommend for workplaces, especially those experiencing low employee morale.
. E. I. Du Pont de Nemours & Co., 210 NLRB 770 1974 CCH NLRB Discharging employee for pursuing grievance concerning his wage rate violates 29 U.S.C.A. § 158(a)(1), since such activity is concerted activity.
See also International Business Machines Corp., 265 NLRB 638 (1982) regarding disussion of wages not being preventable. "We agree. It is well established that discussion of wages is an important part of organizational activity. Thus, to the extent that an employer's policy of classifying its wage information "muzzles" employees who seek to engage in concerted activity for mutual aid or protection by denying the very information needed to discuss wages, it adversely affects employee rights."