Would you like to know what everyone in your company makes?

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Intermediate Accounting.

Boulder-based Namasté Solar, a Solar panel installation company, may be on the cutting edge of business practices by letting employees know what their co-workers are being paid. In addition to bi-annual retreats and a voting system for employees that counts the opinion of nearly everyone in the company, each employee receives equal bonuses.

Questions:

1. According to the article, no worker’s salary is allowed to be more than ________ times anyone else’s.

2. According to the Economist, what percentage of people think that pay should be made public? What are some of the theories on why this is so low?

3. What are your views on salary transparency? Discuss.

4. What journal entry does an employer make to record salary expenses for the company?

Source:

Bradford, H. (2012). Namasté Solar Allows Employees To Know How Much Their Coworkers Make, Huffington Post, June 9 (Retrievable at http://www.huffingtonpost.com/2012/06/08/namaste-solar-pay-policy_n_1582153.html?ref=business)