- Pay secrecy adversely impacts individual task performance because it weakens the perception that an increase in performance will be accompanied by increase in pay;
- Pay secrecy is associated with a decrease in employee performance and retention in pay-for-performance systems, which measure performance using relative (i.e., peer-ranked) criteria rather than an absolute scale (see Figure 2 on page 5);
- High performing employees tend to be most sensitive to negative pay-for- performance perceptions;
- There are many signals embedded within HR policies and practices, which can influence employees’ perception of workplace uncertainty/inequity and impact their performance and turnover intentions; and
- When pay transparency is impractical, organizations may benefit from introducing partial pay openness to mitigate these effects on employee performance and retention.