Government has transparent pay and it's never an issue, but it also selects for people who are not financially ambitious. There are plenty of hard-working, very driven people in the public sector, but no one's there to get rich.

The issue with what we do in private-sector technology is that performance itself is opaque. If we're insistent on matching compensation to performance on a year-by-year basis, then we're going to struggle with transparent salaries, because it means that performance evaluations are public (and can be questioned) and, to be quite frank, that means we (as leaders) make high-stakes, not-easily-reversed decisions on imperfect information, and that's bound to piss people off.

I like transparent compensation, but there are issues to be addressed.

Fully opaque salaries "work" in a way, but it's goddamn unstable. People talk, and in fact policies that prevent them from disclosing salary are can't legally be enforced (anti-unionbusting provision). Soon, people discover all the things that happened because they were expedient, but are unfair-- the guy earning $185k for $120k work because he was plucked from Goldman Sachs. As soon as one person starts talking, the whole edifice comes down.

To make it more interesting, companies that try to enforce a pay meritocracy get hit in a different way. Most technology companies have such a rubric, where each level and job-description has a tight band, but have an informal and semi-secret "High Compensation Program" for people they take out of Wall Street, in order to get their pay back to a comfortable level within 1-2 years. I'll admit that I've exploited such programs, but they are actually more unfair, because they mean that not only does your Wall Street leverage get you a higher salary, but it also gets you faster career progress. Instead of paying you more than your performance merits, they make you into a high performer with fast promotions and plum projects. Great work if you can get it.

There's no easy way to solve this problem. However, I do think that transparency is a fundamentally good thing.

Now, here's a radical idea. Readers of my blog have noticed that I've been delving into the problems of organizations and concluded that there are 4 organizational cultures. The bad ones are the rank (lawful evil / authoritarian) and tough (chaotic evil / kill-or-be-eaten) cultures that comprise most corporate hellholes. The good ones are the guild (lawful good / superior-as-mentor) and self-executive (chaotic good / open-allocation) cultures. The deep issue is that neither the guild or self-executive culture is very stable, especially amid growth; some stronger alloy of the two is needed.

So, here's a radical idea I'd like to try. Compensation is fully transparent. Salary and every bonus is visible. Exceptional individual performance (especially if sacrificial but important) gets a bonus, with heavy input from the group that the achievement merits it. It's not the 20% year-end bonus that everyone gets. This is possibly 50-500+ percent of salary. Classic self-executive reward structure. That should not be expected by anyone. It should be rare and it's not a ding if you never get one.

Salary, on the other hand, is generous but doesn't come from individual achievement. You're assumed to be a good performer, working hard to do great things. Salary (above market) accounts for that already. You get a better salary by taking a mentorship role. (I'm bringing in what the guild culture has.) If you teach people, you're sacrificing individual achievement for the good of the group, and that deserves recognition. In other words, it's the silent multiplier contributions that often go unnoticed (they're not macroscopic achievements, but they make the organization symbiotic and great) that get you a salary-level bump.

That's the model I'd try if I were in charge.