Pay comparisons among employees spark intense emotions.

People are fascinated by what other people make. Like few other attributes, pay allows the rank ordering of individuals, an unvarnished display of where each stands in the hierarchy. Lists of moneymakers, whether Forbes' compilation of the richest people in the world or a local newspaper's list of CEO pay in the market, are always splashed on the cover.

Once a year, Parade magazine, the Sunday insert in many U.S. newspapers, publishes a special issue headlined "What People Earn." It shows a sampling of salaries from stars and political leaders to everyday workers, a little financial voyeurism into data usually considered impolite or taboo at a lesser distance. One of the attractions of Parade's version is that, in finding the salaries of ordinary Joes and Janes, the reader can see who makes more or less than he does. It's one of the publication's best-read issues.

When the comparisons are closer to home, such lists change from fascinating reading to potentially explosive information. The Wall Street Journal told the story of one woman who found on the office copier a document containing the performance ratings, base compensation, raises, and bonuses for 80 of her colleagues. She was "outraged that a noted screw-up was making $65,000 a year more than more competent colleagues, while some new hires were earning almost $200,000 more than their counterparts with more experience," said the story. "The discovery led her to question why she was working weekends for less pay than others were getting. 'I just couldn't stand the inequity of it,' she said. Three months later she quit."

While individual pay usually should not be public, compensation criteria should be.

Individual pay is usually best kept confidential, but common knowledge of established salary criteria is important to feelings of fairness. Workers need to know, as one study found, "how pay plan goals are established, the pay plan goals themselves, how the plan goals are evaluated, and how the payouts are determined." Only from such widely understood information can the workgroup have a belief in what social scientists call the "procedural and distributive justice" of the system. Without it, the organization is exposed to perceptions of favoritism, opportunism, or discrimination.

A hypothetical Harvard Business Review case study lists several of the disparities that can creep in over time: the new hires lured in with more money than veterans make, substantial salary differences between departments, and the higher salaries better negotiators gain over those who agitate less, to name a few. In the entertaining case study, a computer-savvy employee decides to punctuate her departure by e-mailing the salary file to the entire company, creating predictable angst.

The question for decision makers is how large of a riot would be sparked if all pay were public. If a company can honestly say that based on a common knowledge of how it calculates pay, most employees would not find huge surprises in such a leak, the business has this base covered.