Chiang Boon Kong, Great Eastern’s managing director of regional human resources weighs in and tells Lisa Cheong that the idea is pretty idealistic.

Should companies be more transparent and open about employees’ salaries? In an ideal world, it would be a yes.

However, as human beings, salaries are regarded as sacrosanct. Ten years ago, I thought it would be a good experiment to show everyone’s salaries and not be so secretive about it. But over the years I’ve come to realise that even a $10 difference can make employees upset. An employee who is paid $10 less than the next colleague would question, “Am I worth less than the next worker? Why is my colleague getting $10 more?”

Compensation is all about managing expectations. It is never about the absolute dollar and is always relative. People are happy until they find out how much the next person is paid.

It is possible to have transparency in a homogenous environment such as sales, where there is an understanding that a person will earn a certain percentage of the sales that is made.

Companies can also be transparent if there is an appraisal system which is very robust and widely accepted. At Great Eastern, we have a very rigorous appraisal system where we are KPI-driven, with key performance indicators and competencies in our appraisal forms that are conducted twice a year. Bonuses and increments for employees depend on their KPIs and if employees have improved themselves in their competencies.

As for high-level executives, we would rank and band them. This is because it is not just about how well executives perform on a personal basis but also how well they perform relative to their peers. Hence, Great Eastern pays bonuses and increments on how these executives compare with their peers on their job performance and the potential they can bring to the company. 

Increments are based on potential, such as what executives can become and what they can contribute to the company in the future. Bonuses, on the other hand, are rewarded for the past year’s contributions, such as the projects and special assignments.

In spite of that, people can still become unhappy when comparing the importance of projects. Employees might say: “My colleague’s project less important than compared to mine. Hence, I should be getting an 8% increment compared to his 3%.”

Generally, people are aware of which business functions earn the most. In the insurance industry, employees understand that actuaries are highly paid, because their job function involves designing the final product. Other well-paid people include the IT staff, because their IT systems can make or break a company.

But at this point of time, it is a little unrealistic for a company to bring transparency down to the level where salaries are open for all staff to see.