Pay Transparency and Its Impact on Employee Trust
Author : Abinesh J and Dr. S Maruthavijayan
Abstract :
Pay transparency—the open sharing of salary ranges and compensation structures—has emerged as a means to enhance employee trust, fairness, and job satisfaction. In India, however, cultural taboos around salary discussions and hierarchical structures limit its adoption. This exploratory study examines how pay transparency affects employee trust, perceptions of fairness, motivation, and job satisfaction using survey data from 78 respondents across diverse demographics and employment levels. Results show that 56% of participants work in organizations with full or partial transparency, and 41% report higher trust in management, particularly younger employees and those in transparent workplaces. Moreover, 54% perceive increased fairness and 40% greater motivation and satisfaction, though concerns about salary comparisons (46%) and privacy (21%) persist, especially among senior employees. The findings highlight India-specific cultural barriers while underscoring transparency’s potential to build trust and equity. Recommendations include clear communication of salary bands, pay equity audits, and objective performance metrics. Despite limitations such as small sample size and lack of sectoral focus, the study contributes to limited Indian research on pay transparency and calls for larger, regionally diverse investigations into its long-term organizational impacts.
Keywords :
Pay transparency, employee trust, workplace fairness, motivation, job satisfaction, Indian workforce, organizational justice, equity theory, collectivism, high power distance, cultural barriers, compensation practices.
