Lastly, pay transparency comes with a risk when it is not clear how pay is broken down and which elements of the breakdown are included.
If company A posts a sales job with a salary of $120,000 and company B posts the same job with a salary of $140,000 – which one would you choose assuming all other influencing factors are the same?
Every rational person would go for company B, as you will earn $20,000 more.
Now, what if I told you that company B posted their total salary, including baseline, on-target-earnings and vesting stock per year* while company A only posted a baseline salary?
Here it gets tricky, as company A potentially will have a way higher total compensation package – but you got tricked by a high level number.
* Baseline Salary: fixed salary regardless of target achievement
* On-Target Earnings: additional earnings for achieving your target
* Vesting Stocks: restricted stock units vesting or becoming available to you
It will become absolutely essential to understand how salary is broken down and what is included in the salary in a job advertisement. So before starting to celebrate, let’s conclude:
Asymmetry is almost dead, long live a small step towards transparency!
Even with more pay transparency, it will still be crucial to ask the right questions during your screening interview to deeply understand how salary is defined.
If you want to learn more about the breakdown of salaries, this is covered in more than 10 lessons of the Space and Galaxy Program on Preppally.