Transparent Wage System and Its Main Benefits

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Currently, many employees consider material incentives the most significant motivation for their labor. Despite the development of social packages and the internal microclimate in many organizations, most workers attend jobs precisely because of the financial benefits they receive as a consequence of their performance. It is also possible to evaluate the size of wages as a universal assessment of the meaningfulness of an individual for the enterprise. At the same time, at virtually all companies, information about the remuneration of employees is confidential. Access to this data is limited to the company’s management and persons involved in the accrual and calculation of salaries. Thus, it is essential to understand whether the open payroll system is effective and improves working conditions and productivity.

Transparent Salary Calculation

I agree that wages should be transparently distributed to all employees. This demonstrates a respectful attitude in the workplace, a model of meaningful and productive teamwork. However, it is essential to mention that payroll should be allocated according to established performance criteria. This will enable the staff to explain why some employees receive wage supplements and bonuses. Managers can educate staff about enhancing performance to earn higher salaries. Moreover, I support David Burkus’ view that transparent payroll will contribute to a favorable organizational climate and fair treatment of all staff. At the same time, in my opinion, it will encourage some individuals to strengthen their professional abilities to enhance their productivity.

Adams’ Theory

Adams’ theory of justice postulates that people subjectively determine the ratio of the reward received to the effort expended. They then compare it to the rewards of other individuals performing similar work (Trotter et al., 2017). If the correlation indicates imbalance and unfairness, a person believes that their colleague received more compensation for the identical position, then the person is psychologically stressed. As a result, it is required to motivate that employee, relieve the tension, and correct the imbalance to restore fairness (Trotter et al., 2017). Thus, workers who feel inappropriately paid compared to others may start working less intensely or strive to increase their remuneration. Those employees who believe they are overpaid, on the other hand, will aim to maintain their work intensity at the same level or even improve it.

Hence, establishing transparent salaries will exclude employees who will be frustrated because of unfairly distributing funds. In such a case, an individual will know that he will perform more intensively if a colleague receives a higher salary. Consequently, with a diaphanous payroll, employees will try their best to complete objectives to achieve higher wages. Accordingly, Adams’ theory of fairness completely supports the implementation of transparent payroll.

Ethical and Privacy Considerations

It is significant to emphasize that wage transparency is a reasonable and moral practice that is beneficial to both employers and employees. When searching for a job, most workers focus on vacancies where wages are fixed clearly. This encourages employees to develop trust in the company to build a career. Consequently, for ethical reasons, a transparent payroll system creates mutual dependence between employees and the companies and ensures that employees do not feel defrauded or exploited.

When employees are hired, their part of the job is explained to them, the specifics of the business they are joining, an employment contract is signed. There is often a privacy document among the papers the new employee is acquainted with against signature. The privacy agreement does not usually contain a comprehensive list of information classified as secret, but it does include a prohibition on sharing such data. According to this act, a breach of privacy is grounds for the dismissal of the employee (Trotter et al., 2017). Thus, staff members are suspicious that such a rule is implemented in the organization to prevent them from discussing salary levels. In this case, the confidentiality of data is not in favor of the worker; on the contrary, it appears that it restricts his rights.

Discrimination Issues

It is critical to recognize that students often work alongside the company’s regular workers, which is why they must receive a salary that is proportional to their performance. That is, a transparent pay system encourages business owners to evaluate the company’s permanent employees and newcomer students objectively. This way, assuming that their efficiency is the same, they can earn an equal wage without any discrimination.

Transparent payroll contributes to non-discrimination in the workplace. That is, irrespective of gender or skin color, each employee is evaluated according to established and publicly known criteria. If men are paid more than women even though their performance is the same, women can complain to the management to clarify this. They can also apply to claim the trade unions because transparent criteria make it possible to determine which side is right. Moreover, an evident grading scale does not permit discrimination in the educational system because every student understands the evaluation standards.


Hence, a sense of injustice will arise among employees in an open payment system, not due to salary gaps, rather than evaluating the labor performed. Access to information about pay should be connected to the position they are paid for. A transparent pay system will benefit a company’s performance if it is interrelated with a fair appraisal. In this situation, workers will not feel dissatisfied with their own job or injustice in approving the salaries. Each employee will understand what he needs to improve to increase his salary.


Trotter, R. G., Zacur, S. R., & Stickney, L. T. (2017). The new age of pay transparency. Business Horizons, 60(4), 529-539.

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BusinessEssay. "Transparent Wage System and Its Main Benefits." December 30, 2022.