Who Benefits When Salary Info Is Public?

It’s good for pay equity, and it can be good for managers, but it’s not so good for superstars.

This month, laws went into effect in California and Washington State that required companies to post salary ranges on job listings. Like similar rules in New York City and Colorado, lawmakers passed them on the premise that pay transparency helped reduce wage gaps.

There’s little debate among researchers that this is the case. “It is totally 100 percent true across all the studies I’ve seen, with very few exceptions,” Zoe Cullen, an economist at Harvard Business School, said. Pay transparency laws are “very good” at reducing wage disparities, she added.

But that’s not the end of the story. As companies embrace pay transparency — either because the law forces them to, or because their employees are becoming more comfortable disclosing their salaries anyway — both employers and workers have noticed ripple effects. It’s changing how bosses set salaries. And it has the potential to make life a little less lucrative for star performers.

Not climate protection

How important is sustainability in the workplace to people? The Bertelsmann Foundation had this examined and found out something amazing: The younger employees are, the more important they are about classic values such as job security, salary and collegiality. Environmental and climate protection, on the other hand, play a rather subordinate role.

Young workers in Germany take a more pragmatic view of their jobs than is often assumed. In a study by the Bertelsmann Foundation, for which 1,200 employees from various sectors were asked about what they considered to be the most important aspects of their work and their employer, 18 to 24-year-olds named job security most frequently, followed by salary and collegiality.

Salary and Job Security

Salary is still the top priority for Germans when choosing a job. More than two thirds of those surveyed (67 percent) see remuneration as a top employer characteristic. This is the result of a nationwide, representative survey by the opinion research institute Innofact on behalf of TARGOBANK.

This means that the topic of salary has gained even more importance compared to 2017 (2017: 61 percent) when the survey was first carried out. Job security came in second place among the most important employer characteristics this year – half of those surveyed stated that this was of great importance to them.

In 2017, however, it was even more important to those surveyed at 60 percent. The location of the company is also very relevant to those surveyed: around a third attach great importance to this when choosing an employer. Awareness or the size of the company, on the other hand, still do not play a major role (around 4 percent each).

Bet your bottom dollar

Is salary important to workers? Bet your bottom dollar it is.

“Employees will go where the money is. And where they’re treated respectfully and valued. But, mostly, it’s the money.”

When we asked those respondents to choose from a list of top reasons why they’re open to new opportunities, nearly two-thirds (63.4%) selected “I need to make more money”.

That’s more than double the next-most popular reason, which is “I need a fresh challenge” (24.6%).

Work flexibility (20.8%), meaningfulness in work (19.3%) and career advancement (also 19.3%) are other leading factors prompting the drive to explore new job opportunities. Still, those numbers pale in comparison to compensation.

10 factors influence on salary

Why does my work colleague receive a higher salary for the same work and training? If you want a high income and only rely on your own performance, you will be brought back to earth in the salary negotiation at the latest. We show ten important factors that cause salaries to skyrocket.

Don’t overpay your employees!

What drives employees? There are many answers to the question: Responsibility is one thing, appreciation is another. And money? Not so important. More salary can even be dangerous.

According to the motivational pope Sprenger, money can trigger a flash in the pan motivation. “The half-life is usually no more than 48 hours,” says the management consultant. Happiness researcher Ruckriegel is a little more optimistic: “Once the basic needs are met, it takes about two to three months for the employee’s expectations to adjust and for them to be just as satisfied as they were before the salary increase.”

In the long term, however, there is a risk of dramatic consequences from excessive financial generosity. According to Sprenger, it increases the stimulus and expectation level and can thus trigger a real addiction to rewards. Ruckriegel also warns: “You always have to push more, but at some point the end of the road will be reached.” And the higher the starting salary level, the lower the impact on productivity and the higher the greed. Because then the main thing is to earn as much as possible more than the others.

Money is not everything

Do you want to pay your employees a bonus? Beware, this might not be a good idea: Studies show that extra money can hurt employee motivation and job satisfaction.

What is the ideal salary? Even if funds were unlimited, pinpointing the ideal salary would be difficult. The first intuition is: the higher the salary, the better the work results. But studies show that the connection between compensation, motivation and performance is much more complex. In fact, there is some evidence that people would not be happier in their jobs if they had control over their salary.

Salary is important but differently than you think

It is said that a salary increase should have little effect on motivation at work. Appreciation and more responsibility are the key. But that’s not entirely true – because salary does play a role in employee satisfaction.

Money alone does not bring happiness – this is the result of countless job studies that have examined how the level of salary affects the motivation of employees. Sometimes experts are looking for the ideal salary that makes people happy. Time examines how salary increases affect employee engagement. The answers that these studies give to the salary questions are similar: salary increases only have a minimal effect that quickly fizzles out over time. If you want to motivate employees or keep them in the company, you should use other means as a boss.

All of this may be true, but it is not the whole truth. “Money does not necessarily generate motivation, but if the payment is not right, demotivation can arise,” says psychology professor Maika Rawolle from the University of Media, Communication and Economics in Berlin to the “Süddeutsche Zeitung”. The unclear expression of “incorrect salary” is very correct, because there are some salary constellations that reduce motivation. Everyone agrees: It’s about injustice, that is, about a comparison.

2022 Engineering Salary Statistics

What is an engineering degree worth? Year after year, engineering jobs are paid the highest average starting salary. According to the U.S. Bureau of Labor Statistics (BLS) engineers have a median annual wage of $100,640and the engineering field projects to have employment growth of 6 percent from 2020 to 2030—nearly 146,000 new jobs over the next decade.