I worked for a company that paid a bit below market salaries, for the SF Bay Area. I was on a team with two more junior engineers. At one point one disclosed to me that they felt underpaid. That led to a salary discussion where I explained that the company habitually underpaid people, and I was happy to share my salary with them so they would know they're not the only ones underpaid (and also, implicitly, so they'd know if they were getting taken advantage of, since I'm all about employees looking out for each other).
As it turned out, however, I was making around 40% more than both of them. Some of that was due to more experience, but it was more a matter of me being underpaid versus them being outright screwed. Naturally they went and asked for a well-deserved raise, and the company, of course, said no.
This changed the team dynamics in a fundamental, toxic way. It engendered bitterness from them not only toward the company but to me as well, which ultimately led to all of us leaving the company for greener pastures but with lots of bad feelings all around.
You could say the takeaway is don't work for companies out to screw their workers, but that's most of them.
Seems like this is something transparent salary policies might change.
There are plenty of other things that are much more powerful motivators than money, and a good company to work for is probably not the one paying you the most. Otherwise everyone would be in finance working 100 hour weeks and loving it. The issue isn't that someone was paid $X is that they felt they were worth $Y and the other incentives and motivators weren't sufficient to overcome that. If they were paid less than they could command elsewhere but doing work that mattered to them and challenged them, felt valued by the company, were part of a good team, had flexibility in work life balance, were given opportunities to develop and learn, had prospects for advancement and the myriad other things that different people value (and sometimes value very differently) then the situation may have been very different.
From what I've seen, the problem often arise not with people hired at a low pay because they didn't know better, but hired at a low pay because that was the market price at the time. They end up having less pay than people with the same experience (or even less) who were hired later when the market salary was higher.
I disagree. There may be some instances of this, but there are also instances of people who love their job and would not change it for more money.
Money isn't the only motivator.
One doesn't follow from the other, and I don't agree that there's inherent evil just because the salary was lower than elsewhere.
The important characteristics of the companies he's talking about is that they're in an unstable equilibrium dependent on wage ignorance. Meaning that wage info itself would destabilize them rather than any of the mentioned toxicity.
I think he's excluded "companies that underpay but are stable in the presence of wage info" from the class that "should [be expected to] crash and burn".
Random number: 50% of employees consider their employment as a stepping stone.
Most people I know in similar roles to mine act in a similar way. So I'm not so sure that most companies are really out there trying to underpay their employees. In terms of running the business, I want to pay people fairly for a good day's work.
But are you a line manager or is part of your performance KPI's the profit of your unit? Or are you an owner in a small business whose own income is directly influenced by salary expenditure, like when you're running a (small) body shop or sell hours? Those are all very different situations to be in.
> open salaries would be problematic for me, because I've made some bad bets on new hires who are overpaid compared to what they deliver, but where it's not reasonable to fire them either.
Open salaries would give you precisely the leverage you need to reduce those employees' salaries. "Your initial salary was X, expecting better-than-average performance. Your performance has been comparable to Amy and Ben, so your salary now matches theirs." They would either accept the reduction or would leave, without you having to fire them.
The bigger problem would be it would tend to reduce the variance in salaries (why does Carl get 50% more than I do?), which may result in under-paying top performers, reducing their incentive to stay.
In the end, though, the dissatisfaction is an edge-triggered phenomenon, not a level-triggered phenomenon. The introduction of an open-salary model to an opaque-salary environment seems tough for everyone, especially if there is a large disconnect between people's perception of their peer's performance vs. their actual salary. But in an open-salary environment, especially one with a feedback loop, it seems like it would be difficult to get into that state in the first place.
By definition, if most companies are underpaying their workers, they're actually paying market rate.
I define underpaying as "other companies in the market would gladly poach these employees". But just because there are tons of companies willing to poach them, doesn't mean that the employees know this information.
I know one of my senior engineers could get more but I know he'd 1) work more hours, 2) have less freedom, 3) have less flexibility.
I can't pay him what others would pay because it's a consulting business and it's getting harder and harder to get the high rates for the work we usually close.
I'm not screwing him. I make it up in other areas which is why he's still with me.
But he's suggested his market rate is like 30% more when I know the hours he'd have to put in for that are at least 30% more.
So other companies would gladly poach him but it's not apples to apples, and I'm not going to play the game of "high salary" and then squeeze my people to make it make sense.
It got out, people got pissed, which they should have been.
Well, we're lucky enough to be in an industry where there are more jobs than qualified candidate. So if you know your market value, make clear what you want when interviewing, you can find a job that will pay you what you're worth.
I worked for a small startup some time ago where the owner was paying me more than she paid herself but eventually we only had 2 employees left and everything became transparent. My friend (in sales) became all upset about his salary in relation to mine and they gave him a bump. I was eventually the last one left though.
That was my first professional job and it's ironic my buddy in sales couldn't negotiate a rate he thought was fair. He's actually quite good.
People are perfectly fine working for YEARS with their own valuation and then all of a sudden they think they're worth more because someone else is making more.
And then they don't even offer a compelling reason for why they think they are worth more, which is really why they weren't being paid what they think they should have gotten in the first place.
It's every employee's responsibility to know their value and to be able to articulate it. That's a very important dynamic of the workforce whether people like it or not.
My favorite collegiate course of all time had only one agenda - to teach us to think differently in a way to be compelling and persuade. Every project was related to that premise. We don't have enough of these types of courses and that shifts more power to the employers.
Is that an argument? If yes, I don't see it. If people believe that they couldn't earn more they are probably "perfectly fine" due to this missing information. Then they learn what their peers make and think - rightfully* - "just a moment, I do the same job, to the same quality, why is my peer earning more than I am?" which in itself is already a compelling reason (so, your next point usually does not apply).
> It's every employee's responsibility to know their value and to be able to articulate it. That's a very important dynamic of the workforce whether people like it or not.
And open-salary makes this easier and harder to screw people over using information-asymmetry.
* Yes, there are some people who just don't work as good as their peers and that's the reason they don't earn as much. From all I've seen over the years I am absolutely sure that this doesn't count for a significant part of the workforce compared to the part of the workforce that does a job comparable to their peers but still earns less income.
I'd rather say that the main discomfort coming from salary discussions is not caused by money, but about having some people acknowledge that they're not as "good" or valuable (in that setting) as they'd like to think. Social status and "saving face" is very important, and open salaries essentially force some people to be publicly downranked - either by having salaries reflecting their worth (showing some people as not equal to others) or by having mostly salaries (downplaying people who do deserve more).
Often, ignorance actually is bliss; as the lower paid people can keep believing that they're equally valued - opening the salaries can't make them equally valued, they're still be low-paid, but now they'll be angry about it.
So true. I actually had to have a very candid conversation with my business partner and explain to him that my time is more valuable than his based on how and where I contribute and market value, I can't put in time in direct proportion to the time he puts in.
It was a tough thing to discuss but he understood and it was a very good conversation to have so we could move forward with a better understanding. This wasn't a salary conversation but a value conversation which forced him to really think of both of us and the company.
There are also intangibles that people overlook. If someone is more pleasant to collaborate with and adds more value culturally, that could be why they are paid more. Most companies aren't running an assembly line where doing the same job may be more likely.
When salary "discrepancies" are found out, employees won't learn a lesson and take ownership for their situation. They'll spend time investing in their skill-set but they won't spend a little time here and there to do market research or go interview a few times each year or every other year. There's also specialists who can tell you what market rate is for your position if you need help. If you don't accept this as part of the workforce, be prepared to be earn less. That's on you.
Then our experiences differ (which is sad but okay) - I have seen, multiple times, the situation that not only the person who uttered it thought it was true but the better paid peers agreed (and yes, they agreed in private, not only in public where they had to fear to be judged if they said "well no, he is not as good as he thinks").
The dynamics weren't changed, you were all just able to finally see the reality of your situation: you were being taken advantage of and no one told you.
If anything this changed the situation from a developer leaving without notice for a higher paying role at a different company into a situation where the company could have retained them.
Meh, job titles are just buckets.
Comp is also a bunch of buckets.
Why should these buckets be necessarily tied in size?
Lots of flatter organizations have a smaller number of titles but larger comp buckets.
There is nothing necessarily wrong with this.
I've had plenty of experiences where people in equivalent job titles had vastly different productivity (and, justifiably, vastly different titles).
Also, on a practical note, that would require 17 different titles for the same type of job if you have a 5x variation in compensation. That seems kinda crazy.
I really don't care that much about them myself. I do use a few different titles depending on the client however.
"Reinventing Organizations" by Frederic Laloux
"An Everyone Culture: Becoming a Deliberately Developmental Organization" by Kegan and Lahey
The latter profiles Bridgewater, a hedge fund in which every meeting is recorded and available to anyone in the company via the intranet.
Irrationality is the square root of all evil.
What happened to the people who didn't want to reveal their compensation. Was is it revealed anyways?
I make something like 50% more than the guy sitting next to me, but I manage an interdepartmental project and have a different employment category. It's hard for people to honestly evaluate themselves so it becomes a pride issue.
Buffer's transparency dashboard: Public salaries, equity and more .
The original post: Open salaries at Buffer .
The truth is, no one knows what anyone should be paid, really. The market decides it. I feel like this kind of policy just creates a powderkeg of opinion and emotion. Maybe it works for a team of 25 (at least as far as we can see), but definitely not for a company of 500.
Please everyone just put your salaries in Glassdoor and call it a day. Everyone make sure they get paid market or above, be a responsible adult and look out for yourself.
People have to somehow pick "reasonable" salaries for themselves, and it seems like a thin layer of bullshit. If I could set my own salary, I'd set it way higher than any company is willing to pay me, because I'd rather make tons of money then NOT work anymore. Obviously, that's not a thing that is sustainable, and it's up to me to find a business that pays me as close to that impossible number as possible.
This whole like "let's work together and make reasonable salaries for everyone" smells like bullshit to me because no one knows what a reasonable salary is. In the extreme (not so extreme in bubbles) case, if the market moves and all of a sudden your position is worth 30% more than it was a year or two before, will everyone in the company be fine with you getting a 30% raise? Maybe not. I don't ever want to deal with the situation that someone who either doesn't value or understand (completely) tries to value my work. What do developers know about how much project managers should be paid? or vice versa? A good project manager will make or break an entire initiative at times, but I bet most developers can't properly understand their value (and vice versa).
Openness in salaries is one thing. I'm all for knowing what people are worth to a give company, and knowing what the market rate for your position is. This lets-all-decide-everyones-salaries-together system is definitely an idea that grows in parallel, and is very closely related, but I think they're separate things.
Or maybe the reasonable solution to such a mismatch in perceived value is that good employees who can make more money elsewhere just leave (at the risk of maybe entering a less open and enjoyable atmosphere)?
If you believe that there are those differences, that you can judge those correctly (but elect to not act on it), and that other employers can also judge that well enough to offer differentiated higher salaries to the most valuable employees, then you will be left holding an adversely selected set of employees. (Other employers will cream off the most valuable by being able to offer higher compensation, and you will see more of the left side of the distribution applying to your company once it becomes known that "everyone is paid the same".)
Not in every case (maybe a high-value-creating individual believes in your company and mission enough to forgo a higher salary they could command elsewhere), but in aggregate, I believe you signal to the highest performers that they should look elsewhere and your lowest performers should stay, because you are more interested in equality than fairness.
For example, master these 5 skills at level I, and we then meet to set up a process for learning the next 5 skills needed to advance to level II. Once you advance, you get +20% salary.
I think that seems like a good way of incentivizing performance and continued learning.
Or you can start doing super complicated things like "have 5 out of those 10 skills", but are they as valuable?
Yeah, that's a pain. And then another company may value the skill differently, and you then have to just lose your employee to them because they'll pay them more but you won't because of your rigid structure.
There's so many variables, uniformity here won't get you the best teams.
Every scheme I've heard of to get around that has had had some major flaw or other. Usually by failing to capture some important area of endeavour; or by relying on some combination of easily gamed metrics (like tickets closed or evaluations by co-workers); or requiring employees to capture excruciatingly detailed metrics; or by having incentives too small to be worth pursuing; or by including a large management fudge factor that makes the rest of the system pointless.
The reward usually never materializes. You shouldn't do overwork in the first place.
What end's up happening is people in the same year are sorted by many other things. Better more interesting tasks are given to higher status workers, they avoid more grunt work, get nice perks (at top levels, things like a company car, etc.), and more respect.
It's hard to separate the effects of this on the company from all the other things Japanese companies do which are different from USA/Europe. But you might look into that.
Now this certainly has moral pitfalls, if you use it as a carrot to get people to keep upping the ante on each other, but at some point we have to trust the autonomy of our workers to be able to say no. (I believe that management can help with this as well concurrent with keeping salary-based differentiation, by things such as enforcing not working outside of work hours, mandated vacation time, salary transparency and clear metrics for what achieving more/success means, etc)
In my experience, this has never been true. People have different motivations, skills etc.
Although if we can assume that its true, it would be easier to implement govt mandates like Paycheck fairness act.
I don't understand the problem here. Support agents are unlikely to demand a developer's salary.
This is, in part, because every job will value someone slightly differently depending on the unique situation.
That's still not a reason to be secretive. In fact it was cited by the article as one of the great positives of salary openness: you got much more accurate feedback much more quickly which made it easier to make those tricker decisions.
What happens to the guy in open salary co who is legit 50% better than everyone else? Do his peers vote to give him 50% more money? Or does it settle on sort of a union style pay scale, where everyone with the same # of years of work makes the same money (which is great for the worst performances, and terrible for the best performers)
The people who have the most to lose from open salaries are the dopes who somehow are making top-of-market salaries.
I've tried a handful of different ways to explain this (before backspacing out this comment box and trying again), but here's the best I can come up with:
You always have the ability to negotiate for higher pay. If you've spent much of your life in different workplaces, you'll probably know that people (generally) think they deserve raises for reasons other than those that make sense. Those can include:
* Poor personal money management
* Poor life decisions leading to more money needed
* Number of years spent with the company
* Number of hours worked each week
* How busy they appear to be
* How much they think they get done
* How much more work they think they do than they did last year
* How much more work they think they do than their peers
* and more
None of those things really matter, though. Factors that actually matter include:
* How much other employers will pay for your skillset
* How likely you are to leave
* How much it would cost to replace you
This is important because the people actually running the business have to understand this, but the rest of the employees don't. As a high performer, you'll be negotiating a raise based on those factors that actually matter and your boss (hopefully) understands that. You don't want to put him in a situation where he can (or has to) fall back on how the rest of the company will feel about your pay, because they don't necessarily weigh the correct factors in deciding whether or not you "deserve" it.
If I consider myself a high performer, I don't want to have to justify my request relative to others at the company, or what they received, or what they used to win over other people to vote to give them more money that isn't theirs. That's going to put me in a position where I need to win a popularity contest, be around a while (to comment positively on others' raises), or wait a few more months so I don't look pushy and selfish to the entire company.
...because none of that matters if I just do an interview elsewhere and get what I want!
I certainly don't want my salary dictated by the personal prejudices of my coworkers, especially when so many of them have no real idea of how much market value they're creating. I'm sure many of them think I'm a "dope" but my results manage to convince employers that my demands are worth paying.
Not that all top performers do this. Being good at a job has little relation to being good at getting paid a lot. But you can be both a top performer AND top paid, if you play the right cards.
Isn't that transparency, although in a very biased and limited form? Why would having more transparency reduce your leverage? It's easier to play the right cards when you know what cards are in play.
Because of jealousy.
There have to be a good 10-20 software companies with this Open Salary thing. From them, find one where for two people with the same # of years of experience, person A makes 2x what person B makes. From what I see, they all more or less settle on a (base pay) + (# of years * multiplier) + (maybe a location bonus) = Salary. I don't see variables in there for (he is awesome)
For a counter example, I can point you to wallstreet or finance in Chicago, and show you 100s of people where people at the same level make as much as a 2x pay difference.
If you think people in finance don't know what their peers are getting paid you are fooling yourself.
They are overall much more mature and transparent about pay than we are.
If you told a trader their salary was going to be posted publicly, decided by the rest of the employees (including junior employees), and that they couldn't negotiate it then they'd laugh in your face.
Giving up the ability to negotiate your salary is giving up your whole leverage. It's a ruse played by smart entrepreneurs to sucker engineers into taking lower salaries and feeling good about it.
Give that up, and people who are good at their jobs but bad negotiators will tend to do better, and people who are not good at their jobs but good negotiators will tend to do worse. I'd be fine with that trade-off.
Think of all the useless architects on much higher salaries.
As an ex-manager if I wanted to hire a mid level dev who was too expensive I would just hire them as a senior dev.
Edit: or even worse you lock people in based upon a rigid system like years of experience and end up like teaching where an amazing teacher who gets great results will get paid far less than a shitty teacher who has stopped trying simply because the shitty teacher has been around longer.
Every job involves some level of negotiation.
Even as a junior you have to negotiate with senior devs to give you time of day. Even as a junior you have to negotiate on features and estimates.
As you move up the chain it becomes more and more important.
I think most people in finance have a good idea of what their peers are being paid and a good idea of what they need to do if they want to earn more. People are paid fairly objectively and managers are upfront about what they value (at least within a firm).
That doesn't mean employees know exact percentages or bonuses and it certainly doesn't mean they know total comp in $.
When I moved into software development my first manager was shocked that I wanted to plan exactly how to get to the senior level, what I would need to demonstrate, and what kind of pay they offer at the next level up.
He couldn't answer any of my questions and it was like I was the first person who had talked about concrete career goals with him.
Telling people to go on a random walk for a few years and maybe they will move from mid to senior is the kind of transparency you get in tech.
Real transparency would be: If you deliver project X and can demonstrate you got Joe and Raj up to speed on Y then we will promote you/increase your salary/give you a big bonus/put you on the project you really want etc.
EDIT: In theory they should be based on what the employee could get elsewhere in the market, but if that were always true there would be no job hopping.
If you're writing code I can't maintain, my preference is to pay you less. Writing code that is easier to maintain is one sign of a good developer.
I don't want to pay you more because its too painful to lose you. I want to pay you more because its wonderful to have you.
Why would having more transparency reduce your leverage?
Boss: "If I did that, I'd have to give your 20 peers the same raise. You'll need to produce at least $20X value if you want a raise of $0.1X. I can give you a raise of $0.005X if you like"
My experience is that this is a taboo topic.
Companies hate it, as it gives you more bargaining power.
Has to be with people you at least sorta like though, can't go demand it from some 12 cubes over.
The GP is right in that, that person doesn't have much choice but to move on.
I don't have experience with open salaries but I do have experience with collective agreements and seniority. They aren't meant to take into consideration the "super stars". That's not what they are meant to do. Seniority and collective agreements do suck if you're a "super star".
I don't think there's a system where everyone is a winner.
I have taken a lower paying job because of my preference for that job and workplace. Money is not my principal driver (nor is it most people's).
I also agree that an open pay system could encourage super stars to leave. I once hired a woman who earned almost 50% more than her peers because she was amazing (it's the one time I recall paying a premium for anyone). If her peers knew, it would have been a shit storm, especially her male boss (who earned well less than she did).
We are too obsessed about comparing ourselves to others. I would most probably pick a culture where there wasn't transparency because I don't think someone else's income is anyone else's business and the emphasis on money is unhealthy.
So yes, it trends towards more coarse grained measures (years of work doesn't have to be one) at the expense of the "best" performers.
If you see lots of your best performers leaving for more money elsewhere you have 2 options, raise everyone up, or come up with better coarse grained measures.
I'm of the opinion that if you can come up with good objective measures for performance of software devs, you should immediately stop doing whatever made up business problem you are currently working on, and switch to judging software devs. You could literally charge whatever you want.
Or if you're in your twenties or thirties and pretty good at something and want to be paid based on how valuable you are in the market instead of based on your number of years clocking in.
Personally, I'd never want to work somewhere where my salary is set by a formula of my "experience" level.
Yes, but how much greater than $X is the question. If median salary goes up, high performers have to come down a lot in order to not run out of money.
On the other hand if its an arbitary, political or a self appointed measure I can imagine collegues could have a problem.
Sales is one area where measures are somewhat possible. For instance if a salesperson is consistently doing 2 million while collegues do 1 he or she is better in that quarter and is automatically compensated better because of commissions. Collegues far from having have a problem celebrate the achievements and aspire themselves. Similarly if someone closes a deal in half the time of the typical deal cycle then they could be considered to be better. They will close more revenue and get more commissions.
But it is important to point out its not the people but the performance being measured that is better and if you can do this as clinically in other fields compensation can be designed to automatically reward performance.
Presumably, that's how it works.
In my view, these are mostly the latest technique to try to sell employees on subpar compensation through "culture." Except they're even more dangerous than ping pong tables.
I think you mean if you're any good at negotiating salary since doing a good job does not equate with higher pay in most companies.
Also, even if that were true, there shouldn't be any issues because you would just get promoted to a higher position, in which case you'd be paid more anyway.
It seems like there's only an issue if you think you're that much better than everyone else but nobody else feels the same way.
You're also implying that salary is a function of performance. This is an incredible claim to make.
A senior developer is usually P-3 or P-4. It may seem on the low side compared to market rates if you in New York or Geneva - but bear in mind they don't need to pay taxes and get quite a lot of other benefits.
This site has more details on the salaries, benefits and theory behind it:
Performance is how you move up GS and step levels.
There's a complex social dynamic related to that feature in companies.
My rent in Houston was $1100/mo for a 2 bed, 2 bath 1200 sqft luxury apartment in a nice development with hiking and biking trails. My rent in NYC for a 1 bed, 1 bath, 600sqft luxury apartment in a nice building with a doorman every other day (idk why) is $2300. More than 4 times the price per sqft.
Every day staples are 20-100% higher in NYC than Houston. Car insurance is almost triple. Parking which used to be free and assigned is now in a garage and $200-400/mo depending on where you are (thankfully mine is in the rent).
I think the government needs to re-evaluate their adjustments.
Locality is to make a job's salary competitive with other job salaries in the local market, whereas COLA is exactly what it sounds like.
Houston has a high locality rate because of all the high-paying jobs there that one could potentially get instead of the govt job.
I work for the govt and receive both locality and COLA, albeit the COLA is way too low in my opinion (Honolulu).
In the WS scale the 3 highest paid is in KS, MI, and Atlanta. I think they consider what other positions in the same kind of fields are paying for the area.
That's clearly one of the more disaster prone areas of the world.
- you only seen tax return figures, and depending on your family situation, property ownership, tax class, benefits the spread in paid taxes can be easily 2x on same amount. Hardly usable for finding out if someone makes 20% over you.
- the data was available with 3 year delay.
In fact, given the number of people who said this would be a disaster for a company of 25 people two years ago, there's an even greater onus to provide real reasons transparent salaries couldn't work at other companies.
I doubt that BMW has an engineer that earns more than his / her colleague at the same position.
Bob is Engineer, and Joe is Engineer+; it's clear to everyone that Joe is earning more, and if Bob feels underpaid then the explanation for the salary difference is explicit in that he's not (for whatever practical reasons) doing the work/quality/quantity/whatever of an Engineer+.
All they'd do was promote you to the next level and give you a salary in the next range.
Only few engineers in leading position and with larger responsibilty are paid based on an individually negotiated contract.
The problem is that those processes work only when there is certain level of mutual trust, selflessness and honesty. If you have really selfish people this thing can start being gamed... e.g: I refer 100 friends in exchange and have them recommend me for a promotion, raise and bonus every quarter.
Assholes can game any system.
I'd think the raise would be warranted :)
Doesn't it make sense that disgruntled employees should be able to bar a manager giving themselves raises, purely as a matter of symmetry?
Nobody can give themselves a raise. This is always proposed by a boss and checked by the boss's boss. If I want to set a salary for one of my reports I have to consult with the board. The board also determines my compensation.
It would be appropriate to have the manager's pay depend on how they're executing according to the goals of the company and not the goals of the employees - thus, the boss' boss should get a say in that and the employees should not get a vote as their interests may easily be completely opposite e.g. in achieving cost savings for labor-dominated tasks.
Why did it take implementing this program to give those people a 50% raise? Was it not obvious prior to this that they were below market rate? Did Lunar do the traditional salary negotiation discussion with new hires prior to open salaries?
I wonder if the same tendency exists for companies that become internally transparently?
There are two problems with that:
1. Even if employees get to opt out, others still know they opted out. And that can create mistrust on both sides. "Why did Bob opt out? What does he have to hide? Is he making more than everyone else? Is this transparent salaries thing just a way to keep the lower paid people thinking they're actually average?"
2. By excluding those people from the salary meetings, the company basically creates an "in club", the people that know more than everyone else. The opt-out people are now no longer just opting-out, they are literally being kept in the dark about things being shared with others. And like in scenario 1, that will breed mistrust.
Yes, maybe we don't actually know all the intricacies of what's going on, but you're just being a crank.
Then, offers for H-1B workers are available online. Some other information is on glassdoor.
This contradicts the claims of US being such a free and free market country... Sounds Kafkaesque. How does this background check really happen? Can't you deny the disclosure of your previous salary?
Yes you can deny disclosing your previous salary. Usually they will not ask for any official proof anyway so you could make it up or give your expectations.
 That size usually being "big enough to have a dedicated HR department"
Salary should be based on the individual (relevant experience and education) not just a job title.
Why would an employee give away one of the only bargaining chips they have to get a higher salary? When I was working a regular job, I was regularly able to negotiate a 20-30% higher salary than co-workers with the same title.
Companies hate public salaries, and there is ample evidence everywhere to look, including efforts to legally prohibit employees from disclosing their salaries and unenforceable claims in employee handbooks.
More information can never make a market more inefficient.