Question

would you prefer open or secret pay policy

Answer 1

I prefer secret pay policy rather than open pay because, personally, I believe that the open pay policy has a high chance of politics in an organization when the salary is not structured properly. It also demotivates the others who are not considered for performance appraisal or pay rise especially when they think that the one who got it is not worthy of it. Most of the companies do not follow a standard process for measuring performance and hence performance reviews become a formality just to fill sheets of paper. Being transparent in these cases makes the managers and HR would no longer be demigods during the compensation review cycle.  

A person with higher experience might get more than the other one but the performance may look lesser outside. This encourages salary comparison among them giving rise to organizational politics. People may be treated poorly among colleagues directly or indirectly when they come to know about their salary details.

It gives dissatisfaction and affects privacy for the low earning employees when the salary is open which affects the motivation and the productivity of the individual. When the sheets are displayed commonly, it does not look good for the low salary employees to have their names at the bottom that gives an inferiority complex in them.

Not only it affects the employees but also the employers as the competitors may get to know about the salary that is being paid and use the information to make a new job offer with a higher salary and lure the talent away.