Why you should know how much your coworkers get paid | David Burkus | TEDxUniversityofNevada
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0:20 - 0:21How much do you get paid?
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0:22 - 0:24Don't answer that out loud.
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0:24 - 0:26But put a number in your head.
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0:27 - 0:31Now: How much do you think the person
sitting next to you gets paid? -
0:32 - 0:34Again, don't answer out loud.
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0:34 - 0:35(Laughter)
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0:36 - 0:38At work, how much do you think
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0:38 - 0:42the person sitting in the cubicle
or the desk next to you gets paid? -
0:42 - 0:43Do you know?
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0:44 - 0:45Should you know?
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0:46 - 0:50Notice, it's a little uncomfortable for me
to even ask you those questions. -
0:50 - 0:53But admit it -- you kind of want to know.
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0:54 - 0:57Most of us are uncomfortable with the idea
of broadcasting our salary. -
0:57 - 0:59We're not supposed to tell our neighbors,
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0:59 - 1:03and we're definitely not supposed
to tell our office neighbors. -
1:03 - 1:06The assumed reason is that if everybody
knew what everybody got paid, -
1:06 - 1:08then all hell would break loose.
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1:08 - 1:10There'd be arguments, there'd be fights,
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1:10 - 1:12there might even be a few people who quit.
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1:12 - 1:16But what if secrecy is actually
the reason for all that strife? -
1:16 - 1:19And what would happen
if we removed that secrecy? -
1:19 - 1:23What if openness actually increased
the sense of fairness and collaboration -
1:23 - 1:25inside a company?
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1:25 - 1:28What would happen if we had
total pay transparency? -
1:29 - 1:30For the past several years,
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1:30 - 1:33I've been studying the corporate
and entrepreneurial leaders -
1:33 - 1:37who question the conventional wisdom
about how to run a company. -
1:37 - 1:39And the question of pay keeps coming up.
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1:40 - 1:42And the answers keep surprising.
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1:43 - 1:45It turns out that pay transparency --
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1:45 - 1:47sharing salaries openly
across a company -- -
1:47 - 1:50makes for a better workplace
for both the employee -
1:50 - 1:51and for the organization.
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1:52 - 1:55When people don't know how their pay
compares to their peers', -
1:55 - 1:57they're more likely to feel underpaid
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1:57 - 1:59and maybe even discriminated against.
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1:59 - 2:02Do you want to work at a place
that tolerates the idea -
2:02 - 2:05that you feel underpaid
or discriminated against? -
2:05 - 2:08But keeping salaries secret
does exactly that, -
2:08 - 2:11and it's a practice
as old as it is common, -
2:11 - 2:13despite the fact
that in the United States, -
2:13 - 2:17the law protects an employee's right
to discuss their pay. -
2:18 - 2:21In one famous example from decades ago,
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2:21 - 2:23the management of Vanity Fair magazine
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2:23 - 2:25actually circulated a memo entitled:
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2:25 - 2:28"Forbidding Discussion Among
Employees of Salary Received." -
2:28 - 2:32"Forbidding" discussion among
employees of salary received. -
2:32 - 2:34Now that memo didn't sit well
with everybody. -
2:34 - 2:36New York literary figures
Dorothy Parker, -
2:36 - 2:38Robert Benchley and Robert Sherwood,
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2:38 - 2:41all writers in the Algonquin Round Table,
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2:41 - 2:42decided to stand up for transparency
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2:42 - 2:44and showed up for work the next day
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2:44 - 2:47with their salary written on signs
hanging from their neck. -
2:47 - 2:49(Laughter)
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2:49 - 2:51Imagine showing up for work
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2:51 - 2:55with your salary just written
across your chest for all to see. -
2:56 - 3:00But why would a company even want
to discourage salary discussions? -
3:00 - 3:03Why do some people go along with it,
while others revolt against it? -
3:05 - 3:08It turns out that in addition
to the assumed reasons, -
3:08 - 3:11pay secrecy is actually a way
to save a lot of money. -
3:11 - 3:13You see, keeping salaries secret
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3:13 - 3:16leads to what economists call
"information asymmetry." -
3:16 - 3:18This is a situation where,
in a negotiation, -
3:18 - 3:21one party has loads more
information than the other. -
3:22 - 3:25And in hiring or promotion
or annual raise discussions, -
3:25 - 3:29an employer can use that secrecy
to save a lot of money. -
3:29 - 3:32Imagine how much better
you could negotiate for a raise -
3:32 - 3:34if you knew everybody's salary.
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3:36 - 3:39Economists warn that information asymmetry
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3:39 - 3:40can cause markets to go awry.
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3:40 - 3:42Someone leaves a pay stub on the copier,
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3:42 - 3:45and suddenly everybody
is shouting at each other. -
3:46 - 3:47In fact, they even warn
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3:49 - 3:53that information asymmetry
can lead to a total market failure. -
3:54 - 3:56And I think we're almost there.
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3:56 - 3:57Here's why:
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3:57 - 4:02first, most employees have no idea
how their pay compares to their peers'. -
4:02 - 4:06In a 2015 survey of 70,000 employees,
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4:06 - 4:10two-thirds of everyone who is paid
at the market rate -
4:10 - 4:12said that they felt they were underpaid.
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4:13 - 4:15And of everybody who felt
that they were underpaid, -
4:15 - 4:1860 percent said
that they intended to quit, -
4:18 - 4:21regardless of where they were --
underpaid, overpaid -
4:21 - 4:23or right at the market rate.
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4:24 - 4:26If you were part of this survey,
what would you say? -
4:26 - 4:27Are you underpaid?
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4:27 - 4:30Well, wait -- how do you even know,
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4:30 - 4:32because you're not allowed
to talk about it? -
4:32 - 4:36Next, information asymmetry, pay secrecy,
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4:36 - 4:39makes it easier to ignore
the discrimination -
4:39 - 4:41that's already present
in the market today. -
4:42 - 4:45In a 2011 report from the Institute
for Women's Policy Research, -
4:45 - 4:48the gender wage gap
between men and women -
4:48 - 4:49was 23 percent.
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4:50 - 4:53This is where that 77 cents
on the dollar comes from. -
4:53 - 4:55But in the Federal Government,
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4:55 - 4:57where salaries are pinned
to certain levels -
4:57 - 4:59and everybody knows
what those levels are, -
4:59 - 5:01the gender wage gap
shrinks to 11 percent -- -
5:01 - 5:03and this is before controlling
for any of the factors -
5:03 - 5:06that economists argue over
whether or not to control for. -
5:07 - 5:09If we really want to close
the gender wage gap, -
5:09 - 5:12maybe we should start
by opening up the payroll. -
5:12 - 5:16If this is what total
market failure looks like, -
5:16 - 5:19then openness remains
the only way to ensure fairness. -
5:20 - 5:22Now, I realize that letting people
know what you make -
5:22 - 5:24might feel uncomfortable,
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5:24 - 5:25but isn't it less uncomfortable
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5:26 - 5:28than always wondering
if you're being discriminated against, -
5:28 - 5:32or if you wife or your daughter
or your sister is being paid unfairly? -
5:33 - 5:37Openness remains the best way
to ensure fairness, -
5:37 - 5:39and pay transparency does that.
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5:39 - 5:42That's why entrepreneurial leaders
and corporate leaders -
5:42 - 5:45have been experimenting
with sharing salaries for years. -
5:45 - 5:46Like Dane Atkinson.
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5:46 - 5:50Dane is a serial entrepreneur
who started many companies -
5:50 - 5:52in a pay secrecy condition
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5:52 - 5:55and even used that condition
to pay two equally qualified people -
5:55 - 5:57dramatically different salaries,
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5:57 - 5:59depending on how well
they could negotiate. -
6:00 - 6:03And Dane saw the strife
that happened as a result of this. -
6:03 - 6:06So when he started
his newest company, SumAll, -
6:06 - 6:09he committed to salary transparency
from the beginning. -
6:09 - 6:11And the results have been amazing.
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6:12 - 6:14And in study after study,
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6:14 - 6:15when people know
how they're being paid -
6:15 - 6:17and how that pay compares to their peers',
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6:18 - 6:20they're more likely to work hard
to improve their performance, -
6:20 - 6:23more likely to be engaged,
and they're less likely to quit. -
6:23 - 6:25That's why Dane's not alone.
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6:25 - 6:27From technology start-ups like Buffer,
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6:27 - 6:31to the tens of thousands
of employees at Whole Foods, -
6:31 - 6:34where not only is your salary
available for everyone to see, -
6:34 - 6:37but the performance data
for the store and for your department -
6:37 - 6:39is available on the company intranet
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6:39 - 6:40for all to see.
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6:41 - 6:44Now, pay transparency
takes a lot of forms. -
6:44 - 6:46It's not one size fits all.
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6:46 - 6:48Some post their salaries for all to see.
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6:48 - 6:50Some only keep it inside the company.
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6:50 - 6:53Some post the formula for calculating pay,
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6:53 - 6:55and others post the pay levels
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6:55 - 6:57and affix everybody to that level.
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6:57 - 6:59So you don't have to make signs
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6:59 - 7:01for all of your employees
to wear around the office. -
7:01 - 7:04And you don't have to be
the only one wearing a sign -
7:04 - 7:05that you made at home.
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7:06 - 7:09But we can all take greater steps
towards pay transparency. -
7:10 - 7:12For those of you that have the authority
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7:12 - 7:14to move forward towards transparency:
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7:14 - 7:15it's time to move forward.
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7:16 - 7:18And for those of you
that don't have that authority: -
7:18 - 7:20it's time to stand up for your right to.
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7:21 - 7:23So how much do you get paid?
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7:24 - 7:27And how does that compare
to the people you work with? -
7:27 - 7:28You should know.
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7:29 - 7:30And so should they.
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7:32 - 7:33Thank you.
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7:33 - 7:36(Applause)
- Title:
- Why you should know how much your coworkers get paid | David Burkus | TEDxUniversityofNevada
- Description:
-
How much do you get paid? How does it compare to the people you work with? You should know, and so should they, says management researcher David Burkus. In this talk, Burkus questions our cultural assumptions around keeping salaries secret and makes a compelling case for why sharing them could benefit employees, organizations and society.
This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDxTalks
- Duration:
- 07:41
Ivana Korom edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
TED Translators admin edited English subtitles for Why Do We Keep Our Salaries Secret? | David Burkus | TEDxUniversityofNevada | ||
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