Talking About Salary Can Motivate or Demoralize Pay transparency—being open about what each person is earning—is getting a lot of attention these days as a way to identify and address pay inequities, particularly those that might stem from bias against women, minorities, or other groups. What transparency means varies from one workplace to the next. At the extreme, a few organizations, such as the social media company Buffer, are going so far as to post their salary formulas on the Web for all the world to see.[1] For most, transparency is far more subtle. It may involve sharing the employer's compensation formula with workers, eliminating language in contracts that bar employees from discussing their compensation, or turning a deaf ear to employees' informal watercooler conversations about pay. But in the Byzantine world of physician compensation where pay—even within the same specialty and the same organization—can vary, such conversations are fraught with potential problems. "I think pay transparency is definitely a double-edged sword; it can motivate or demoralize," says Dr Roberta Gebhard, president-elect of the American Medical Women's Association (AMWA) and chair of AMWA's Gender Equity Task Force. A Double-Edged Sword Many people of all professions are averse to discussing their salaries. Some say it's no one's business. Others, who may be high earners, don't want resentment from coworkers or don't want to be accused of favoritism—even if the pay is completely based on performance. And some managers or supervisors say that people whose salary is less than that of others on the basis of their performance simply don't believe that their performance is not as outstanding as someone else's. Should doctors breach an age-old social taboo and start talking to each other about compensation? The answer is complex. The idea behind pay transparency is simple: By providing individuals with the information they need to benchmark their compensation against that of their peers, transparency will enable people to determine their value in the marketplace and promote equity. Although the idea may sound straightforward, the execution can be anything but. What's more, for every argument touting the benefits of transparency, including linking it to better employee collaboration and improved employee performance, there's another body of research showing its dark side, including increased employee dissatisfaction, turnover, and a decline in productivity when employees feel they have been treated unfairly. Salary Is More Than Just Money MGMA principal Nick Fabrizio is an advocate for transparency, but he cautions that a little knowledge can be a dangerous thing. Incomplete information can actually be detrimental. "I think it's important to frame the information and share it, as long as people understand that sometimes compensation isn't what it appears. Just knowing what someone else makes isn't even half of the story, because there are so many factors that influence that." Compensation calculations can be ridiculously complex, Fabrizio says, with the vast majority of hospitals and practices using formulas that factor in customer satisfaction, citizenship, call schedules, productivity, quality, administrative stipends, and other metrics. "You may have six or seven different components that make up your compensation, and only one part of it is base salary." Those critical factors are often overlooked when colleagues start chatting over coffee, says Dr Richard Johnston, chief executive officer and chief physician officer of USMD, a large medical group serving the Dallas-Fort Worth area. "People will talk with a friend and say, 'I'm getting $50 for a relative value unit (RVU).' If you're getting $40 for an RVU, you feel underpaid," he says. But the doctor earning the $50 rate may have a chintzy benefits package, whereas the one earning the lower rate may have a fully loaded package that includes a 401(k) match, a week off for continuing medical education (CME), and other perks. Health Systems Have Many Compensation Systems Industry consolidation has further complicated the scenario. Because it takes health systems time to phase out the legacy compensation systems of the smaller practices they acquire, large systems often have many compensation systems in place, says Travis Singleton, executive vice president of the physician recruiting firm Merritt Hawkins. As a result, there are definite inequities in compensation models, he says, emphasizing that Merritt Hawkins' data show no evidence that those inequities in nonacademic medicine are gender-based. (The same does not seem to hold true in academic medicine, where compensation packages are often negotiated individually by department heads, he says.) "Today, you have a lot of health systems that employ 3000 or 5000 physicians, so it's very common for them to have 10 different compensation systems and that is a huge, huge problem," he says. "When those employment agreements run out and you make compensation changes, you are probably going to lose 10%-15% of your staff. You can't do it all at once. So I don't see how you can have transparency in today's healthcare system, given how fragmented and local it is." Despite the knotty issues, shifting cultural norms are making it increasingly difficult for organizations to ignore the push for transparency. "I think the culture is shifting," says Ariana Hegewisch, program director for employment and earnings at the Institute for Women's Policy Research in Washington, DC. Although federal efforts to improve transparency have stalled recently—in August 2017, the Office of Management and Budget halted an Obama-era rule that would have required companies with more than 100 employees to report what they pay employees by race and gender—numerous states are taking action.[1] A number of states, including New York, New Jersey, and Vermont, have laws preventing employers from retaliating against employees for discussing salary, and in 2017 alone, California, Massachusetts, and Oregon passed bans prohibiting employers from asking job candidates about their salary. The California law goes even further, requiring employers to provide pay scale information to job candidates. "As such legislation extends beyond a handful of states: it is only a matter of time until we live in a world with new salary transparency norms," the human resources consulting firm Mercer noted in a white paper it published earlier this year.[2] Millennials Are Sharing Salary Figures But shifting attitudes may be even more powerful than legislation. Millennials, who have grown up perpetually sharing on social media, don't adhere to the same social mores as their predecessors. In a 2017 telephone survey of more than 1000 adults by Cashlorette, Bankrate's millennial money website, 30% of millennials surveyed said they've shared salary information with a colleague, compared with only 19% of Gen Xers and 8% of baby boomers.[3] Such websites as Glassdoor, which enables users to anonymously post salary information, and salary surveys are likewise making it easier to share compensation information and fueling conversations about pay. Johnston says that physician compensation was once regarded as a private matter. Today, he says, "you can't go anywhere where you don't hear about compensation. It's the topic at most national meetings, and they will always present a survey that will show you are getting paid less than you should." Finally, employers themselves are changing, Hegewisch says, with a growing number sharing the details of their pay philosophies with employees and talking to them about the achievements and behaviors they reward. "When you talk to large, good employers, they will say, 'We would never leave something as important as pay to the vagaries of individual negotiation.' They are very aware that there is an expectation of fairness among the people that they want to hire." What Do You Earn? All that said, asking a colleague what he or she makes as a way of benchmarking your compensation may seem bold to many and simply out of line to others. "I think talking about pay is often still a taboo issue, so in a way you still have to read your colleagues," Hegewisch says. She recommends turning to online resources, such as Glassdoor and Payscale, as a more advisable first step. For doctors, such sources as Medscape or MGMA might be more apt. That said, Hegewisch notes, conversations about pay definitely cross genders. "Women concerned about pay equity shouldn't assume that they will only find allies among other women. I think they can talk to male peers too. It doesn't have to be a divisive issue, but I think the discussions can be a little complicated." She suggests individuals couch their inquiries a little obliquely. For example, someone might say, "I'm thinking about buying a house, and I'm wondering what you think pay progression around here will be like." Before broaching the topic with a colleague, Gebhard cautions individuals to check their contracts and make sure they aren't contractually prohibited from discussing their compensation. She also advises them to be prepared for answers they may not want to hear. Gebhard once asked a much younger colleague about his salary on behalf of a resident she was mentoring. Because she had nearly two decades of experience under her belt at the time, she thought her fresh-out-of-residency peer would have a better bead on starting salaries. "I found out he was making $10,000 more than me. It pretty much soured my feelings about working there," she says. Times Are Changing Dr Ranit Mishori, a professor of family medicine at Georgetown University School of Medicine, says taking a backward approach to the conversation can also be helpful. At one point in her career, sensing she was undercompensated, she disclosed what she was making to a male colleague and asked him whether he thought it was fair. Without putting her colleague on the spot, she was still able to glean important information. His feedback: "That's not right. You should be making more, based on your rank and performance." Mishori went on to gather more information and consult a spreadsheet on physician pay published by the Association of American Medical Colleges. Armed with more data, she was able to successfully make her case. "I grew up in Israel, where it's not gauche to ask about salary," Mishori explains. "Only when I got to the United States did I realize it goes against the cultural norm. But knowing where you stand is the first step toward achieving equity." In calling transparency a "first step," Mishori echoes a theme reiterated time and again by compensation experts and women's advocates alike. "Knowing someone else's compensation is a data point. But if you think just putting the salaries on the door is the answer, that's a pretty short-sighted way of looking at the problem," says Merritt Hawkins' Singleton. "It doesn't mean it won't help, but transparency is part of the solution. It isn't the entire solution." That's because physicians—both male and female—can use information garnered from informal conversations to advocate for themselves in some situations, but it won't work in others. If a doctor is paid less than a peer because she was part of a 200-physician group whose legacy compensation formula paled compared with that of her peer, she's not likely to find much traction. "The health system isn't going to do something for her that they aren't going to do for the other 200," Singleton says. Still, he believes that time and operational necessity will ultimately diminish the discrepancies currently roiling compensation plans. "Organizations can't manage 20 different compensation formulas and all those different productivity patterns," he says. "They just can't." References Buffer. The next evolution of transparent salaries: our new remote-first formula and updated salary calculator. Source Accessed April 13, 2018. Mercer. What the salary history ban and pay transparency legislation mean for you. February 9, 2018. Source Accessed April 10, 2018. Salary secrets spilled: millennials are piping up about their paychecks. Cashlorette. October 18, 2017. Source Accessed March 23, 2018. Source
