Understanding Open Salary Policies: Pros, Cons, and Implementation

At a recent GDC talk, Lightforge Games CEO Matt Schembari shared the company's approach to open salary policies and the benefits it has brought to the organization. Schembari, a veteran of Blizzard and Epic Games, emphasized the importance of transparency in the workplace and how it can lead to a more equitable and trusting environment. The concept of open salary policies involves sharing full compensation information with all employees, including names, titles, levels, and other contributing factors. This approach can seem daunting, but Schembari argued that it has been a resounding success for Lightforge, with a significant boost in recruitment and a more diverse hiring pool. One of the primary reasons for implementing an open salary policy is to address the growing trend of corporate responsibility and transparency among younger workers. With 46% of the full-time workforce in the United States consisting of millennials and Gen-Z workers, companies must adapt to meet the changing expectations of their employees. Schembari cited a Gallup study, which found that workers value employers who care about their well-being, are ethical, and have transparent leadership. Open salary policies can also help combat structural inequalities by providing a clear and transparent system for determining compensation. Schembari quoted researcher Morela Hernandez, who stated that keeping compensation secret can obscure structural inequalities and enable them to persist. By maintaining pay secrecy, companies can inadvertently perpetuate inequalities, whereas pay transparency can help to address these issues. To implement an open salary policy, Schembari suggested starting by opening up existing salary spreadsheets and making them accessible to all employees. This approach can help to build trust and foster open conversations around compensation. Lightforge has also implemented a standardized pay structure and job level system, which helps to ensure that conversations around hiring and promotions are based on job expectations and responsibilities rather than negotiation. While there are challenges to implementing an open salary policy, Schembari emphasized the importance of normalizing conversations around compensation. By doing so, companies can create a more equitable and transparent work environment, which can lead to increased trust and job satisfaction among employees. In conclusion, Schembari encouraged attendees to take the first step towards implementing an open salary policy by educating themselves and their teams about the benefits and challenges of this approach. By embracing transparency and open communication, companies can create a more positive and productive work environment for all employees.