transparent compensation


One of the pillars of having a productive and collaborative distributed team is having a team that’s built on trust.

Trust is the glue that binds teams together, but telling your leaders to “just go trust your team,” can be daunting advice. Here’s why you should consider a transparent compensation approach to build stronger, trusting relationships at your company.

Transparency Around Compensation Can Supercharge a Team

John Mackey, co-founder and co-CEO of Whole Foods Market, cites how transparency has worked for years at Whole Foods. Mackey cites how there are no questions around how people are being tips compensated at his company. As a result, Whole Foods is able to get rid of (untrue) compensation gossip, false misconceptions, and it helps people feel they are being treated, and compensated, fairly for their work.

“[Transparent, open compensation] directs people …in their own career choices, they can see which positions are better-paid positions,” allowing people to better plot out their career paths within the company, Mackey explains. Individuals can see the path they want to go down, and how certain choices can result in greater compensation. That idea helps individuals, and the team, improve—and not to mention the approach helps people stay focused.

Transparent compensation also holds a company and it leaders to a different kind of standard, one where any kind of nepotism of favoritism would be exposed.

“It creates a greater sense of this solidarity in the team,” he adds. “You have to strive to create compensation that is fair in terms of the external market and also fair in terms of your internal equity.”

While you can never force an employee to be engaged, you can at least avoid common reasons why people are disengaged.

As Mackey points out, a transparent compensation setup helps drastically reduce feelings of unrest, unwarranted envy, and a lack of perceived fairness.

Looking for other ways to build a sense of openness and trust in your organization? Part two of this series will examine the power of transparency with customers and company partners.


This blog was written by Kim SykesREAD MORE: If you liked this post, you might like The Small Giants Community is Coming to Cincinnati” 

Kim Sykes is a marketer and content creator at Edoc Service, Inc., a total virtual company