Leak of Salary Information in an organization

I had a call from a friend of mine, who runs a small organization. When we were discussing Payroll and its operation, he asked me if he could do the Payroll processing himself. On enquiring the reason (as generally his accountant handles it), he informed me that he is really bugged about the leak of information, comparison of salaries and the subsequent heart-aches and effect on morale.

Why does this happen in almost every organization? Inspite of the best efforts of the management to keep this information confidential, how is it that people have the information? This is a question that really amazes me.

Which brings me to another point. Should it or should it not matter to a person on what his peer is getting? Here are some points that describe various views:

1. Why should two people performing a similar job get different salaries?
2. Why can't the employer be fair / knowledgeable when they recruit?

On the other side
1. Why should an employee feel bad - he was the one who negotiated his salary when he joined?
2. If an employee was unhappy about his salary, he could have approached his Boss for a review. Why should he feel bad after knowing that someone else is making more?
3. What happened to "My work, My salary"? Why does someone feel more strongly that they should get higher after learning someone else is getting more?

My opinion is that it should not really matter what others are getting. If I think I deserve more, then I should ask for it. Else, if I am still unhappy, then I should quit here and move on. If neither of the options are possible, then I should learn to feel happy with what I am getting.

Does any of the below mentioned facts influence my opinion:
- I run a small company
- The current economic and Job scenario.

An interesting survey and discussion on a similar topic can be seen at this article on the BNet Blog.

Selective Access to HR Policies

We are implementing our HR solution for a fairly large organization (2000+ employees). We had just gone live on the Leave module and a lot of employees were applying online for Leave. A number of employees were getting a message of "Leave Not eligible" even though they had a balance in their account. The organization had a fairly complicated Leave Policy and most of the employees were not aware of the full policy.

I was speaking to the HR Head of the organization and informed him of this problem. I also told him that this could be addressed by publishing the Leave and other Policies online. His response was "Other companies will then become aware of our Policies and the benefits that we provide and will copy them. So we would like the info to be confidential".

Does it really matter that you are giving a Car to a person at a VP Level and the knowledge of this is a competitive advantage? Or that you are giving a Study Leave to employees of "X" category and no other organization would know about this or implement this?

Even withing an organization, does it cause intense distress to an employee to know that his Boss is entitled to a Toyota Car and he is entitled to a Maruti 800? Will it be judged the same way if the benefit is money and not a non-monetary benefit? Can it still be made public? The question is open!

There is another interesting article on this at the Evil HR Lady blog.