RE: GOSSIP LO561

Stuart A. Umpleby (umpleby@gwis2.circ.gwu.edu)
Mon, 27 Mar 1995 21:38:30 -0500 (EST)

Replying to GOSSIP LO521 --

Re disclosure of salaries to co-workers, I believe that salaries of all
employees of public universities are available if requested, because they
are public employees. My university is private, and salaries are not made
public. I suspect it would be hard to show that private universities are
more effective because of secrecy in salaries. I have heard that there is
a literature on this subject which says that when people do not know
salaries, they overestimate the differences, thereby creating jealousy and
distrust. The conclusion is generally that openness re salaries helps to
create trust.

A related issue is salaries of CEOs. Some people say that very high
salaries for CEOs are unjustified. Others say that high salaries for CEOs
are there not to motivate the CEO but rather the people who are trying to
become the next CEO.

------------------------------------------------------------------------
S.A. Umpleby, Dept. of Mgt. Science, GWU, Wash. DC 20052 USA
tel: 202/994-7530, fax: 202/994-4930, e-mail: umpleby@gwis2.circ.gwu.edu
URL: http://gwis2.circ.gwu.edu/~umpleby