It seems like this could be fairly easily resolved by the management having a rigid "we pay everyone the same, deal with it" position, perhaps up and and including a formula for salary computations.
Where the Board stops hiring and delegates to management.
Edit: Not that it isn’t currently gamed and not that this doesn’t already happen: I’m pro pay transparency but there aren’t any magic fixes here, this is a really complicated social issue.
The high performers will view it has a hard cap on compensation and look elsewhere, in my experience at least. Obviously this cannot be entirely correct, but it's hard for me to get into the mental space of someone who wants to be paid exactly as much as their peer sitting next to them. In my career I've always wanted to outperform the next guy - and be compensated accordingly.
I say this as having been both a high performer and an under performer. In the hard personal years where I am underperforming I would love transparency and know what to expect. In the years I was "crushing it" I'd have set myself back financially by a decade+ had I simply been okay with the average compensation for my position.
And the only people I can think of who would prefer the existing opague system would be those who benefit from it: management and people receiving outsized salaries for some anti-merofratic reason.
That was me! I can say without a doubt I quickly learned to only work for small companies where I reported to the owner directly. This enabled me to get 50% raises YoY when starting out - where my corporate job was limited to the typical "well, that wouldn't be fair to the rest of the group" style politics.
I would say it's vastly more important to the hypothetical vulnerable high-performer than the guy graduating MIT or Harvard working for Google. They start at an extremely high salary and will do fine no matter what. The high performing high school dropout needs rapid massive raises just to eventually get to par with the other group - assuming similar performance.
I can almost guarantee you that if salaries were transparent it would have been a huge scandal in a few of the companies I worked at since I was making 2-3x the wages of those next to me. It would have been untenable for those managers to pay me that, even though/if I were worth it - they'd have done nothing but deal with politics and fallout from it. I still believe I was underpaid in most of those positions compared to the folks they had working there.
Egos are easily bruised. When that 19 year old high school dropout is making more than the 45 year old with a degree people start to complain. Loudly. They don't even look at work output or performance - it's utterly irrelevant to most.
I see both sides to this, but I'm relatively certain salary opaqueness helped me through the start of my career. Now? Maybe not as much. It's much harder to stand out at an exceptional level once you reach a certain point.
Location base: For the other 65% of the base, we factor in each location’s cost of living using Numbeo together with data from Payscale and Glassdoor, which we then use to have a base salary for that particular location (say New York or Cape Town).
[1] https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
When you notice that someone that brings zero value to the company gets the same salary as you one of two things happens:
1. you either loose any incentive to do anything
2. or you quit.
In time all what you're left with is the people you don't want.
(Termination protection does not apply if the behavior of the employee is the reason: http://www.gesetze-im-internet.de/kschg/__1.html)
The process may not be fast, but for a useless employee, it would be difficult to claim that the termination was unjustified, so the outcome is essentially guaranteed. I would call that easy (as opposed to simple).
If its so easy to fire in the USA why is hr so paranoid about it
Employer tribunals are not free and are intimidating to use, so many people who are wrongfully dismissed don't seek justice.
Also, do you really want to set up your incentives such that the smart thing to do is work just hard enough to avoid getting fired?
I got sick of being compensated the same (typically worse) as the worst employee on the floor, while doing 5-10x the productive output.
All these policies do over time is ensure you lose top-tier talent and eventually get stuck with a lot of middling folks who are content with the status quo. This can be a good or a bad thing, depending on who you are.