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Pay Transparency: Will discussing it openly help reduce Gender pay gap?

Gender pay parity is something that keeps boardrooms, panel discussion and companies busy. But, it is also a huge challenge that companies face. And, pay transparency has been touted as a potential solution. Is it now?

What is pay transparency?

Making employee salary information readily available to all employees is known as pay transparency. Bonus pay, bonus, equity compensation, and other details may be included.

Pay transparency is essential for women for a number of reasons. First, by granting everyone access to the same information, it helps level the playing field. Women cannot successfully advocate for themselves if they are unaware of what their male counterparts make.

Second, pay transparency can help in identifying and resolving salary inequalities. Let's say women see they are earning considerably less than their male coworkers for the same job. They can then bring it up with their employer and negotiate for a more fair wage.

Last but not least, wage transparency can contribute to a more just and equal workplace in general. Employers find it more challenging to pay women less than males when everyone is aware of one another's salaries.

Levels of pay transparency

  • Full transparency: Full transparency means it allows the employee to know other employee’s salaries completely.

  • Partial transparency: Companies won't disclose overall salaries of the employee, but they communicate the salary for specific roles while hiring the employees.

  • No transparency: Companies don’t disclose the pay. They believe that pay transparency might destroy the company image.


1. Fills gender pay gap:

Even now, in the face of the fight for women's empowerment, the corporate world still has a significant gender pay gap. Its helps to create a female friendly workplace. More and more female candidates will apply for jobs because of open pay. In fact, it makes it simple for them to negotiate a compensation that is comparable to that of their male counterparts.

2. Transparency builds trust:

Building trust with employees is the big challenge for all Software Development Companies. Pay transparency helps build trust among employees. The employees feel comfortable as there is no bias in the organisation. They feel motivated to work more and more

3. Increase productivity:

Productivity plays a large role in companies. The employees productivity declines if the employees feel that they are paid less than other employees. It has a direct impact on productivity. If the Software Development Companies disclose the pay transparency they can often be seen in overall performances.

4. Reduces attrition:

The main reason for an employee to leave the Software Company is for pay they feel that they are less paid and not valued. Pay Transparency helps employees to stay longer & it can reduce the attrition rate up to some extent.

5. Less negotiation:

An employee cannot negotiate if there is no transparency since they would not know if they are being paid less. Employees won't bargain with authorities once they are aware of the specifics of the wage scale. With salary transparency, there will be less opportunities for discussions within an organisation.

In a perfect world, companies would not be motivated to pay their employees fairly by regulatory compliance. In the end, we need to create workplaces that recognise each employee's efforts and work towards reducing the gender pay gap.

(Author: Praveena Battila is a chirpy & inquisitive digital marketing executive at TechDoQuest.)

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