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Exposing Pay Secrecy

By Michael Wesson, Adrienne Colella, Ramona L. Paetzold, Asghar Zardkoohi

January 2007

Academy of Management Review, Vol. 32, #1, pp. 55-71


Pay secrecy is a contentious issue in many organizations and a controversial one in our society. However, there has been little scholarly research on this topic. On the one hand, many organizations have pay secrecy policies, which are often assumed to have negative consequences. On the other hand, economists tell us that pay secrecy must provide benefits to organizations or they would not use such policies. It appears that most knowledge about this topic is really based on anecdotal information. We hope to address this void by exposing the complexity of pay secrecy as a construct. What are its costs and benefits? And what factors affect the link between pay secrecy and the extent to which it is a cost or benefit? This article reveals the complexity of pay secrecy and, we hope, generates ideas for much new research in the broad management field.


Compensation, Justice, Pay Secrecy, Privacy

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