In today's job market, people frequently change jobs instead of staying with one until retirement. This change in attitude prompts employers to work hard to retain their current employees and attract new ones. A strategy to address this challenge is pay transparency, highlighted by the SHRM for its effectiveness.
Employers can include salary information in job listings to give potential applicants clear compensation expectations. However, this could potentially demotivate current employees or lead to employees asking for higher salaries.
Therefore, pay transparency alone is not sufficient - employers need clear guidelines. This can be achieved through a pay scale, providing both parties with a firm understanding of their current position and potential for advancement.
This is why civil service positions in Germany, or roles in large companies with established pay scales, are attractive. They offer clear potential earnings, a path for career progression, and contribute towards achieving pay equality. However, this can be challenging for smaller businesses, particularly if they already have employees on different salaries for the same position.
Furthermore, the German government has implemented the Transparency in Wage Structures Act (German: Entgelttransparenzgesetz) to advance pay equity. If a company has over 200 employees, any employee has the right to request a salary comparison and gain clarity on the pay criteria for similar positions. The BMFSFJ website offers guidance on how employers should handle such requests.
(Updated on 15 March 2024)
Resources:
Kathryn Mayer
