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.