Just in case you were not dealing with enough big issues, it turns out that there is another one that just might be headed your way. This one has to do with just exactly how much you are willing to let everyone in the IT department know about your employment agreement with everyone else in the IT department. Yes, you guessed correctly: I’m talking about open-pay policies.
What Does Open-Pay Really Mean?
You may have heard about open-pay policies, but let’s take just a moment and make sure that everyone’s on the same page here. When you implement an open-pay policy, you open up IT department wide salary information to all employees of the IT department. In most cases, this information is not disclosed outside of the company. There are three stated goals of any open-pay policy: get pay and performance problems on the table, for discussion, eliminate any salary inequalities, and hopefully spark better performance in your IT employees.
As you might well imagine, implementing an open-pay program can generate some fairly awkward conversations within an IT department. When your employees start to compare paychecks they may be surprised at what they are, or are not, earning. One of the motivations for implementing an open-pay policy from the perspective of the person with the CIO job is that it can eliminate the nasty surprises that can show up when employees accidentally discover what other employees are making.
One of the biggest benefits of an open-pay policy is that it can help to eliminate discrimination. Far too often, both women and minority groups are being underpaid in IT departments but they don’t know it. Opening up discussions about pay can eliminate a great deal of insecurity that these workers feel about their paychecks. There is a good chance that both women and minority group members may have asked for too little when they joined the IT department. Revealing salary information can identify this issue and can help people to start to move to correct it.
Is It Worth It To Share Everything?
When you switch to an open-pay policy there are a number of things that you are hoping will happen. Chief among these is that any performance problems will be more openly discussed. If someone is being paid a great deal of money and they are not performing, then this will become a topic of discussion. As the person in the CIO position it will then become your job to have a talk with this person, not an easy talk to have, and perhaps a salary adjustment needs to be made.
One of the greatest benefits from a CIOs perspective is that with an open-pay policy you hope that your IT employees will perform better and will end up staying longer with the firm. The reason that this will happen is because now the employees will feel as though your pay criteria are fair. Finally, any pay inequalities that may have existed in the IT department will be eliminated.
At the same time there is the possibility of unintended consequences from implementing an open-pay policy. The managers in the IT department need to be prepared to answer a lot of questions about why one employee may be getting paid more than another worker who is doing the same job. Any of your employees who prefer to keep their salary information private from the people that they work with may end up being embarrassed. If there are workers who other workers feel as though they are not doing their job, then there may be a fair amount of criticism heaped upon them.
What All Of This Means For You
On top of all of the issues having to do with the importance of information technology, now as CIO there is another issue that you have to wrestle with: considering implementing an open-pay policy. This type of policy will make what you are paying each employee public knowledge within the company – pay will no longer be a closely held secret.
There can be some significant advantages to implementing a policy like this. It can eliminate surprises that occur when people accidently learn what others are making. It can eliminate discrimination against women and minority workers. Ultimately it can lead to better performance from every worker. However, implementing a policy like this will lead to a lot of questions that IT managers will have to answer. Any employee who is being paid a great deal but is not viewed as living up to their responsibilities will start to be questioned about why the company is paying them so much.
CIOs should think long and hard before agreeing to implement an open-pay policy. Activating such a policy will have both a short term and a long term impact on the IT department. In the short term it is going to be quite disruptive while everyone sorts out how they feel about everyone else’s salary. In the long term it may make your IT department a more attractive department to join. Give it some thought and then decide if you are up to being open.
Question For You: If pay discrepancies are discovered in your IT department, what do you think the best way to deal with them would be?
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What We’ll Be Talking About Next Time
If you are doing what a CIO is supposed to do, then you’ve spent time and energy assembling the best IT department that you possibly can. You’ve weeded out the non-performers, replaced them will skilled IT professionals, and now you feel as though your IT department is ready to take on the world! However, there is just one fly in your ointment – how are you going to take on the world if your best workers leave your IT department?