Why W.L. Gore are afraid to have open salaries

W.L. Gore is one of the most famous democratic companies in the world. They are 100% owned by employees; there’s very little hierarchy, with leadership occurring organically by people voluntarily choosing who to follow; and a high level of personal freedom for employees to innovate and be autonomous in their roles. It works spectacularly well. They are massively profitable and market leaders in several product areas.

So I was surprised to learn recently that at Gore, salaries are kept secret, which is contrary to the transparency around financial information in most democratic companies.

For most traditional companies where salaries and other financial details are kept under wraps, it’s usually fear driving the behaviour: Fear of the consequences of unfair salaries being discovered or fear of letting go of control of important information. Gore doesn’t seem to have these fears. Colleagues are evaluated by their peers to ensure salaries are set fairly and they have demonstrated in many areas that they are not afraid to give up control. So what’s going on? Why would they not want the benefits of higher trust and scrutiny that fully open books bring about?

Gore say that they have a different fear: They want leadership to be merit-based above all else and they fear that if colleagues know what everyone else earns then they may show a bias towards following the higher earners rather than the best person in a particular context. I can understand the logic behind this, but to me it’s still a practice rooted in fear rather than freedom, possibility and trust (the mindset of the best democratic leaders) so I wonder if they could do better.

Humans are not purely rational creatures and we are naturally biased in many different ways. Even with closed salaries, it’s possible that people may be biased towards following leaders based on age, gender, personality, physical characteristics and many other traits which are even further removed from true merit than salaries. I wonder if having closed salaries is fighting a symptom of bias, when perhaps a better approach would be to educate and increase awareness of bias among all colleagues to help them make more conscious decisions. If they did this then they could enjoy the benefits of greater transparency, and make better decisions about choosing leaders and more.

3 thoughts on “Why W.L. Gore are afraid to have open salaries

  1. I used to work in the NHS, within a certain limit everyone knows roughly what each other earns – directors’ salaries are in the annual report and people tend to talk openly about what ‘band he or she is’. This transparency (and yes it could be better) was seen as key to ensure that there was less discrimination, particularly amongst women. This also relates to what is expected of people and their level of responsibility. On occasions this can have constraining effect more than an enabling one. To me openness is not the ‘be all and end all’, it just seems rather normal.

  2. This reminds me also of the ‘school uniform debate’. Hide the differences, as a route to allowing equal expression.

    A friend of mine used to say “Value the differences; and get on making a difference”.

    For me, differences whether in gender, personality, physical type, experience, age and even pay are all really valuable in an organisation. But only if we shine a light on the value that they each bring. And at the same time focus on doing something more useful than sniping at the differences.

    Maybe this is why Gore get away with this – because of their strong focus on Vision – what the company will be like, and what it delivers to its stakeholders.

  3. So what I take from Rob & Pete’s comments is that context is all: in some situations, dampening down (some) differences supports self-expression and the emergence of (arguably) healthier, trust-based relationships. In others, e.g. the NHS context, transparency and amplification of differences ends up heightening underlying similarities and engenders trust another way….

    And i am beginning to confuse myself, but I think there is a logic there. My one personal experience in the territory of salary transparency was when a colleague (and friend) was made my immediate line-manager years ago, and we realized that in the new context of our relationship he needed (?!) to know my salary. The conversation became interesting when it quickly became apparent I earned more than him, and I believe he went off an negotiated an increase in his own package as a direct result of that….

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