Exploring secrecy in pay communication: a conceptual matrix

Abstract

PurposeThe purpose of this paper is to develop a conceptual framework that clarifies the construct of pay secrecy.Design/methodology/approachParalleling organizational justice research, two continua of pay information – a distributive continuum about pay raise outcomes and a procedural continuum of pay raise processes – are crossed to produce a 3 × 3 matrix with nine distinct forms of pay communication.FindingsDrawing on the substitutability effect from the organizational justice literature, the matrix highlights the importance of considering how the communication of different types of pay information interact with one another as individuals form pay perceptions.Research limitations/implicationsThe matrix framework illustrates that not only information content shapes pay perceptions, but also the extent to which different types of pay information are communicated, and how these different types of information interact. As with any conceptual framework, the current manuscript is limited by a lack of empirical testing.Practical implicationsManagers should be cognizant of the many different ways in which pay information can be communicated. A call is made to reconsider the use of traditionally binary terminology (secret or not) in favor of more accurate descriptions of the nuanced ways in which organizations communicate pay information.Originality/valueThe value of the pay communication matrix lies in the nine unique forms of pay communication arising from the interaction of two different forms of pay information – distributive (outcomes) and procedural (process).

Pay Transparency: Why it is Important to be Thoughtful and Strategic

“…To date, there is a dearth of theoretical research involving pay transparency (Fahn & Zanarone, 2022). Yet, pay transparency is informed by the pay communication literature (Holtzen, 2022), the pay information disclosure literature (Brown et al, 2022), and the principle/agent literature (Tse, 2022; Fahn & Zanarone, 2022). Pay transparency could also potentially benefit from future research involving the components of organizational justice (Scheller & Harrison, 2018), motivation (e.g.…”

Contingencies in the effects of job‐based pay dispersion on employee attitudes

“…2 Job-based pay differentials in this context are clearly visible to all employees because this information is openly communicated through job titles and related pay grades. Pay criteria and pay formulas are openly shared, indicating a high level of procedural transparency and general distributive pay transparency (Holtzen, 2022). We focus on job-based pay dispersion, as this component represents a large portion of employees' overall pay (87.5% of total pay, on average, in our sample) and varies substantially among employees within a work unit.…”

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“…This is not to be confused with formal and informal pay communications when referencing who is communicating pay information. Some literature refers to formal pay communications as derived from the organization, while informal pay communications come from employees and consist of discussions among employees (Holtzen, 2022).…”