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Compensation: Pros & Cons of Disclosure

Gueutal & Stone (2005) state that an organization's communication practices can have a profound effect on how employees respond to an organization's compensation practices and whether the organization gets what it wants. Assess the pros and cons of your organization's communication approach in regard to compensation practices. Offer a different strategy that would provide more value to your organization as well as its employees. Provide specific examples to support your response.

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It is not uncommon for government agencies, whether Federal, State or Local (such as public safety, department of transportation, etc.) to advertise positions with salaries. Often when taxpayers are essentially funding (via taxes) government operations, there are public disclosure laws wherein compensation is no secret. Additionally, public sector employees are often represented by unions, with the collective bargaining agreement (CBA) also subject of public disclosures. There are pros and cons to having such readily available information on compensation.

The first pro is potential employees are aware of pay structures - and know what to expect. If a ...

Solution Summary

This solution is over 400 words and provides several pros and cons of an "open" compensation program. The examples provided are from the perspective of public sector, government employees. Compensation is often disclosed in the hiring process, and employees typically know what their peers are paid. This can create morale issues, and also public scrutiny. The solution explains why disclosure of compensation can be beneficial using "real world" examples.