Research conducted at a large commercial bank in Asia revealed that sharing salaries is considered taboo and breaking this taboo can have consequences. In an experiment with several hundred bank employees, it was found that workers were overly confident in their knowledge of their colleagues' salaries, with 60% of them believing they could guess the average salary within 5%. However, only a third of people were actually able to do so. This lack of accurate information can impact salary negotiations and willingness to approach employers for raises. Gender differences were observed, with women being less confident in their knowledge of their peers' salaries compared to men. However, both genders were similarly informed on average when making guesses about others' earnings, indicating that they were able to adjust for the gender wage gap. These findings highlight the importance of accurate salary information and the potential impact of the salary taboo on workplace dynamics.
One of the primary reasons we work is to earn money, but many of us feel uncomfortable telling others how much we make. This fear may be working against women, because research has shown that salary transparency can help narrow the gender pay gap.
With the help of experts, we explore the complexities of talking about our salaries. First, an economist walks through the pros and cons of disclosing your pay. Then, the host of a personal finance podcast explains why she encourages people to speak openly about salaries. Finally, an HR executive gives advice on how to deal with the gut punch of learning that a peer makes more than you do.
Our HBR reading list:
Sign up to get the Women at Work monthly newsletter.
Email us: womenatwork@hbr.org
Our theme music is Matt Hill’s “City In Motion,” provided by Audio Network.