Salary levels

Why do nearly all companies insist that individuals' salary levels must be kept confidential? This has always surprised me, as on the stock exchange (for example), the value of stocks isn't secret. Neither are the annual rich lists, which outline the top income earners (and stockpilers) for the year.

A few years back, a workmate and myself compared our salaries (well outside the work compound of course). I had put forward that we hired this guy (I was responsible for doing the interviewing and hiring of his position... to help me out on the team, which previously only comprised of, well, me really). So, we figured that I would be paid slightly more than him, but hopefully not too much more (our skill levels, experience, etc was broadly comparable). It turned out that he was getting nearly 20% more than me per year. That made both of us feel a bit uncomfortable... I was getting ripped of (it would seem), and now the person that hired him all of a sudden seemed a lot less valuable to the company. The dynamic between us changed needless to say!

The reason for the different starting salaries, as it turned out, is that we both stated what we wanted to work for. My workmate, quite rightly, named a higher starting price, but they went for that figure, no questions asked. I guess I learnt my lesson.

Here is a great article following on from this, of course once again from Joel Spolsky.