Examining the layered veil of pay transparency: Implications for perceived ambiguity, sensemaking, and negotiation

In the last decade, pay transparency-making pay information more accessible and understandable-has become a defining workplace reform. We examine the common assumption that pay transparency reduces pay disparities by improving negotiation outcomes. Our cross-disciplinary review suggests that pay transparency's effects on negotiation hinge on three factors: (1) how transparency is operationalized (i.e., what type of pay information is shared); (2) how people interpret the information provided; and (3) whether transparency alone can motivate and equip individuals to leverage that information to negotiate effectively. We distinguish three interrelated negotiation-relevant layers of pay transparency-job offer, peer, and market-and then assess how these reduce ambiguity, shape negotiator sensemaking, and influence negotiation processes and outcomes. We conclude by outlining implications for future negotiation research and practice.