One of the first maxims I was told when I started working full-time was "Don't talk about sex, politics and religion." It took me just a few weeks more to learn another taboo subject: salaries. Unless you are hired within a corporate cohort where everyone receives the same compensation package and signing bonus, you are usually in the dark about the salaries of those around you performing similar functions. This is escalated during bonus season, where the tie between performance and compensation can become even more blurred, thanks to a lack of transparency.
Evil HR Lady calls companies out on this practice in her recent post "What if You Knew Everyone's Salary?" (http://www.bnet.com/blog/evil-hr-lady/what-if-you-knew-everyone-8217s-sa...). As a professional working overseas, I have found that employees discuss their salaries much more openly than in the US, with most people knowing what their colleagues at all levels make. This situation does sometimes result in unrealistic expectations on the part of less-experienced employees, who may be comparing their positions to other individuals who have decades more of experience. But it also creates the space for a dialogue about what a reasonable salary is for a certain position and the performance expectations that go with it. It also lays out a clear path for high performance with individuals making their own judgement calls on what they feel they are worth -- and voting with their feet if they feel they aren't being valued enough.
Taking this concept further is the Open Book Management school of thought (http://en.wikipedia.org/wiki/Open-book_management). This practice lays out the company's spending and defines its values and relative priorities for now and the future. For our small business, this type of discussion is vital for achieving our goals as a company -- we don't have enough layers to obscure how we are doing and what our goals are. We simply have to share information to get things done. This may be a lot of transparency for those still taking baby steps, but it is worth considering if you are looking for a lasting way to motivate your employees as empowered partners, no matter what your size. Even if this isn't possible for your company as a whole, it is possible to work towards as a department head or division leader.
Have you or your company taken steps towards transparency, whether about salaries, bonuses, or other pieces of your business? What happened as a result?