A workplace with no secrets

A week ago educator and content creator Ankur Warikoo, 41, took to LinkedIn to share that his startup follows "cent per cent transparency" where everybody knows everyone's salary. "Every month, the company financials are shared with the team... There is nothing hidden. I want people to focus on their work and their growth. Not in uncovering secrets; there shouldn't be secrets," wrote the Faridabad-based author-entrepreneur. His post received bricks and bouquets in equal measure. While some appreciated the idea of pay transparency, others termed it impractical, dangerous, and a nightmare for the human resource team.

"Both, the companies and employees spend an obnoxious amount of effort towards hiding and finding everybody's salaries, even though it is unnecessary," Warikoo tells mid-day, adding that the reason why companies do it is because they lack the mechanism to determine the right salary for a person hired at a certain level or designation. "The moment a person goes to their head of the department [HOD] or HR saying they have another job offer, the company realises that they can't afford to lose that person. They try to match the salary that has been offered to them. When they do it, the system has been disrupted and now that person's salary has to be kept a secret from others."

Rayyan Monkey, co-founder of The Fatsmeagol Collective, says companies that are "secretive" about their finances, don't realise that employees eventually find out salary-related information. "This is disruptive information; it can raise questions about identity, race, privilege and nepotism"

The solution to this, he says, is investing in a benchmark exercise. "At every stage of the career ladder, there is a minimum and maximum salary bracket for an employee. I benchmarked 12 Internet companies and the average salaries that they pay for a particular job. Once it is done, you get a salary bracket and you can choose where you want to peg your organisation. I have pegged myself at 50 percentile, which means I follow the median. There are companies who have pegged themselves at 70 percentile, which means they pay more than the industry standards. Some companies peg themselves at 30 percentile, and they may be compensating employees through perks," says Warikoo. While hiring, he says, his job is to determine the level at which people applying for the job are, before making them the offer. "I don't ask anyone about their last drawn salary. Whether the salary I offer them is 10 or 50 per cent higher than their last drawn salary or lesser, it is what I can afford and I am not going to change that because I have qualified them at a certain level based on my judgement," he adds.

At Warikoo's startup, every member's salary, including his - he earns Rs 4,00,000 a month - has been listed on an excel sheet. Performance bonus and perks are included. "As a result, no one ever talks about salary. Everyone is happy with what they are getting and is aware of what others are getting as well. There is clearly an aspiration to go higher, but there is also a very logical explanation to why you are not there yet," he explains, adding that it is important to remember that a person's salary is decided basis his performance and years of experience, both.

At The Fatsmeagol Collective, everybody who has worked with the organisation for a year or more, legally becomes a director

Warikoo is not alone. The demand for pay transparency has been there for some time. In Colorado, the department of labour and employment made it mandatory for employers to include compensation in job postings with effect from January 2021. Washington, Nevada, Connecticut, California, and Maryland too, have laws requiring salary-range disclosure. The recently passed New York City Pay Transparency Law makes it mandatory for companies to disclose salary ranges for any "advertised job, promotion or transfer opportunity" starting next month. In India, 57 per cent professionals surveyed for LinkedIn's 2019 Global Talent Trends agreed that pay transparency is crucial to a company's progress.

Guncha Khare, who works as culture director at Dextrus Workspace, agrees. "As an HR professional, I don't see any harm in keeping salary-related communication open. It definitely works well for a small team. But where large teams are concerned, and transparency around individual salaries may become the HR's nightmare to manage, organisations can keep information related to job description and salary slabs private. It infuses internal growth as well. If I know what my senior is getting and the role that s/he is playing, and I am aspiring for that role, I know what I can talk to my HR rep or HOD about; it makes the process easier," shares Khare, adding that a transparent culture builds trust. "When an organisation is transparent about its policies, its recruitment system, its compensation system, how they decide on bonuses or appraisals, the fear of people having unproductive conversations goes out of the window."

Ankur Warikoo and Guncha Khare

Bengaluru-based software company Sahaj adopted the idea three months after its inception in 2014. Co-founder Akash Agrawal says it has increased the sense of ownership among the employees. "It has made our workplace more collaborative. People feel valued here and this is reflected in our lower attrition rate as compared to industry standards," he tells us.

Mumbai-based Rayyan Monkey, 31, has co-founded The Fatsmeagol Collective, an employee-owned democratically-run organisation, which offers services like social media marketing, content creation, photography and filmmaking. "Both Ishita [Shelat, co-founder] and I were disillusioned with the conventional power structures that existed in creative agencies," says Monkey, adding that they were repelled by how secretive the organisation was regarding the amount of money they made from their clients. "Most of us would inadvertently find out. This is disruptive information; it can raise questions about identity, race, privilege and nepotism." That led them to start their own collective. Here, everybody who has worked with them for a year or more legally becomes a director, and all the decisions, whether administrative or client-based, are taken through discussion and vote, if needed. "When it comes to the salary, we have an excel sheet that shows everyone's monthly earnings, and also showcases the organisation's expenses. Everyone has access to it."

While acknowledging that the collective has evolved and grown to become a hyper fluid and dynamic organisation over the years, Monkey admits that it hasn't come without its share of challenges. "At the end of the day, an ‘employee-owned' organisation never attracts any investors. Without investors, you can't compete with the salaries that other conventionally structured agencies can offer, and creativity does not necessarily follow ideals, as much as it is drawn towards higher remuneration," shares Monkey, adding that while it has slowed down decision-making, it has contributed to informed decision-making.