LONDON • Against a backdrop in Britain of gender pay gaps and ongoing disputes over executives' earnings, employees at one London company are helping each other set salaries.
Betting firm Smarkets has adopted a radical pay transparency policy, allowing employees to see their colleagues' salaries and have pay rise requests endorsed by peers.
In a company where pay increases of 10 to 30 per cent are common, software engineer Angeline Mulet-Marquis received the 12 per cent more she asked for - as all of her colleagues could see on the internal website. Recently graduated engineers are paid a salary of around £45,000 (S$72,700) at Smarkets, which rises to six-figure salaries for highly qualified senior engineers.
Despite London's reputation as a hub for start-ups and a global business centre, such openness about salaries is rare in the British capital.
Ms Susana Pinto oversees Smarkets' biannual pay reviews, through which an employee asks around five peers for feedback and a suggested pay increase that they can take forward.
"It's not just a matter of saying, 'Hey, I think you're great!' It's actually going to be probed," Ms Pinto said of the feedback provided.
Further talks and comparisons to industry data determine the final pay increase, although if the employee is not happy they can set their own salary.
But such a move is said to be rare, as employees are well aware they will have to face their colleagues who will know they have gone against their advice.
This extends to stamping out alleged gender inequality which has marred some British firms. For example, the BBC was forced last year to disclose the salaries of some of its top staff, showing men made up 12 of the 14 highest-paid posts and leading to complaints of unequal pay for the same work.
Despite the success of pay transparency at Smarkets, which has about 100 employees, a number of staff said they were unsure the same approach would work for large firms or different industries.
Professor Jordi Blanes i Vidal at the London School of Economics said such a system would work best in areas such as sales where there are clear markers of performance. "But in settings in which it is not as easy to justify differences in pay - that is, pay inequality - with differences in productivity, pay transparency can be very demotivating."
However, pay transparency is more widely accepted in other countries. In Norway, the tax agency publishes key information online about taxpayers each year, including their earnings and wealth.
A study by the European Commission found "cultural sensitivity" was the most common barrier to rolling out similar pay information rules across the continent, while in Britain the associated costs were the main obstacle.