Pay transparency isn't just a mandate—it's the foundation of trust in high-performing cultures. The latest Lattice 2025 State of People Strategy report highlights what many of us in HR know has been a troubling trend:
"Though compensation transparency caused quite the uproar in previous years, new state-level legislation in the US requires companies in some states to disclose salary bands in job postings — much to job seekers’ delight. But that hasn’t kept organizations from finding workarounds (like remote-first tech companies claiming open roles are 'not eligible to be performed' in such states). The result has hampered progress, and this year’s survey results made that clear. Since 2022, the number of HR professionals who feel their company does a good job with compensation transparency has plummeted — only 8% of respondents rated their organization as doing an excellent job in 2024. Meanwhile, the number of respondents who say their company is doing a poor job has more than tripled."
When companies sidestep transparency, they undermine trust and create expectation alignment gaps. Why does this matter? When expectations aren't aligned, time and energy are wasted on guesswork instead of focusing on the high-impact work that moves a company closer to its goals.
Intentional transparency builds trust and is a core component in aligning actions with values, creating environments where clarity, autonomy, and accountability thrive; the three foundational ingredients in high-performance cultures.
Let’s move beyond tricks and 'legal' workarounds and embrace transparency—not because we have to, but because it's right for our people and businesses. Implement a job architecture with pay bands and a compensation philosophy aligned with your company values and financial constraints. Share it with your managers and employees, make it accessible, and spend time communicating the “why.” You’ll find a reduction of noise in your system and a new focus on what matters. Plus, building this foundation brings benefits that resonate throughout your company, with financial gains topping the list. Let’s look at just a few.
How about financial efficiency and cost controls? Do you like these things?
Implementing a job architecture with defined pay bands enables companies to manage headcount costs strategically, often the largest in their OPEX. For example:
Optimize budgeting. Predict and control payroll expenses more accurately, aligning them with financial objectives.
Prevent salary inflation. Avoid overpaying for roles by sticking to predetermined pay bands, ensuring compensation remains competitive yet cost-effective.
Maximize ROI. Allocate financial resources where they have the greatest impact, enhancing overall profitability and sustainable growth.
Do you care about attracting and retaining top talent?
A structured compensation philosophy gains you:
Competitive advantage. Offering fair and transparent compensation packages attracts high-caliber candidates in a competitive market.
Employee retention. Increasing job satisfaction by providing clear career progression paths and equitable pay, reducing turnover costs associated with recruiting and training new employees.
Enhanced productivity. Motivated employees are more engaged and productive, contributing positively to the company’s performance.
Do you value improved transparency, fairness, and compliance?
But wait, there’s more! How about my legal and compliance friends out there? Did you think I forgot you? Never friends, I got you, because improved transparency, fairness, and compliance happily follow the implementation of these foundational structures. Establishing a clear job architecture promotes:
Equitable compensation. Ensures employees are paid fairly based on their role, experience, and performance, reducing pay disparities and biases.
Regulatory compliance. Aligns compensation practices with legal requirements, minimizing the risk of legal disputes and penalties related to wage and hour laws.
Trust and engagement. Fosters a culture of transparency and trust, enhancing employee morale and organizational reputation.
Now, I realize many of you are probably thinking, “Yeah, Karina, this is not revolutionary—we know and hear you, but doing this is hard, complicated, and may be expensive. Also, if we do this, won’t we lose flexibility?” I hear you, and I get it; I disagree, but I get it. I’ve implemented these systems in many companies where things were quite messy—or perhaps, let’s say, not quite transparent or structured—and yes, it takes some work. One of the most significant chunks of work lies in the change management required to bring employees and managers along for the journey and educate them to become experts in their new system. This is where your HR muscle comes in; leverage their expertise and let them lead the way—it’s hard, do it anyway; it’s worth it.
Now, I do have some good news to share. Technology has advanced significantly over the years, and many new products and services are now focused on supporting these systems. By leveraging solutions within your budget, you can make this process far less painful and accelerate your time to value. For example, tools like Assemble, Kamsa, and CandorIQ are just a few(there are many!), that offer products and services to help you design and implement these systems successfully. Ask your HR team what products they have been tracking and what they are seeing on the market. Don’t let the fear of change get in the way of the value you can create within and for your business.
All of this is to say that the expectation alignment you gain from these structures is the magic behind high-performing cultures rooted in high autonomy and high accountability. Do you want to win or what?
Alright, enough of me lecturing—let’s wrap this up. Transparency in decision-making is one of the most critical elements when building trust, especially in leadership. If you cannot explain why and how you came to a decision or are afraid of employees finding something out, perhaps you should pause and ask yourself if that is the best path. If trust in leadership is low or absent, the time spent communicating direction and aligning towards shared goals will be exhausting and never generate the results you seek. Complaints about pay, performance misalignment, and high turnover costs are all in your future (or perhaps your present), and your energy, like that of all employees, would be better spent on work that will move the business closer to achieving its goals.
If you're ready to embrace transparency and transform your organization, let's connect! I’d be happy to chat about your situation and help you identify the structures you need to build within your business that drive actual results. Let’s create a coalition of the willing, and together, we can build cultures where people and businesses thrive.
Founder & CEO, Unraveled
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