New legislation on salary transparency will take some of the guesswork out of job hunting for Ontarians, but a University of Guelph management professor says listing a salary range in a job posting could lead to unexpected consequences.
Under the new Working for Workers Act, which came into effect Jan. 1, companies must specify on job listings the expected compensation, within a $50,000 range, along with bonuses, commissions or allowances.
Dr. Nita Chhinzer, a professor of leadership and organizational management in the Gordon S. Lang School of Economics, says pay transparency allows people to decide what they think they are worth when looking for a job, but this could also present challenges for marginalized groups.
“Marginalized people might hesitate to apply to jobs that are on the higher salary range, and self-select out of the process, thereby creating a glass ceiling for themselves inadvertently,” Chhinzer says. “They could’ve been the best qualified candidate, but because they chose not to apply, they’ll never be assessed.”
Posting salary information up-front can help employers and employees avoid lengthy hiring processes for a job where the money may not be the right fit. Chhinzer says posting salary ranges will help set realistic targets for what a job is worth.
“For example, a job seeker who wants the role of a junior project manager might have a faulty or inflated expectation about what compensation would look like for that job,” she explains. “If they review multiple job ads and see that their expectation is outside of the range, they might adjust their own expectations and be more realistic about what kind of compensation that job deserves.”
Existing employees may also look at salary ranges to assess their own worth at their company.
“They might misinterpret the higher end of the salary range as their target or minimum, given that they’re already working for the organization,” Chhinzer says. “Essentially, this might trigger some perceptions of unfairness amongst existing employees.”
Chhinzer is available for interviews.
Contact:
Dr. Nita Chhinzer
chhinzer@uoguelph.ca