Pay transparency is potentially the hottest of the compensation hot topics. As certain states and countries regulate a degree of transparency, whether through job postings, salary range openness, or disclosure of gaps, companies have had to respond to an increasing level of openness. Beyond regulation, pay transparency is often heralded as a best practice for organizations seeking to build trust and fairness in their compensation structures.
But is transparency itself the goal?
We believe that pay transparency is an important part of how an organization builds trust and maintains a competitive compensation program, which helps the organization attract and retain talent that drives business performance. Pay transparency is a tool to support a strategy that ultimately results in business performance. Transparency is a means, not the end.
Buffer is often cited as the gold standard for pay transparency, as the company fully discloses all salaries and its pay formula. Their approach certainly aligns with a philosophy of maximum openness. However, as their own leadership acknowledges, it is unclear whether such extreme transparency can scale effectively. Buffer’s size has remained relatively stable over the past five years, and while they have recently returned to growth, their trajectory suggests that complete transparency may not be a universal driver of business success. Additionally, while transparency fosters trust for some, there is undoubtedly a segment of workers who prefer to keep their compensation private—some of whom might have contributed significantly to the company’s success had they felt comfortable joining.
If the goal is transparency for its own sake, then Buffer is a clear leader. But if the goal is a holistic compensation strategy that supports both employee experience and business performance, other models might be more effective.
Checkly is example of a slightly less transparent, but very open and fair approach to pay transparency. Checkly publicly communicates the formula used to determine compensation, and provides a calculator to show the math. They don't follow the calculator all the time - in their guidance for pay reviews, they state they want to be flexible to manage edge cases. While we don't necessarily agree with their whole approach, we can see how this model can create trust without being "too open" for some workers.
Not ready to publish a formula - or find that a bit too simple? Consider another example from a client of ours: an enterprise software company with 800 employees across a dozen countries that embraces transparency—but in a structured and strategic way. Instead of publishing every individual salary, they openly share their pay ranges across levels and clearly explain how those ranges are determined. Job postings include expected pay, ensuring offers are fair and market-driven. Additionally, the company does not negotiate salaries, maintaining consistency and adherence to its principles.
Beyond base pay, the company is transparent about how performance assessments impact equity grants, ensuring that employees understand the link between their contributions and rewards. This approach achieves key goals: employees have confidence that their pay is both market competitive and internally equitable, without requiring full exposure of every individual’s salary.
Pay transparency should not be an all-or-nothing proposition. Companies must define what level of transparency best serves their employees and business objectives. Effective pay transparency programs:
In short, transparency is a tool—one that must be wielded thoughtfully. Companies that strike the right balance between openness and practicality will likely see the greatest success in both employee engagement and business performance.