Personal Salary Reports: Seeing Through The Fog
Are “Personal Salary Reports” causing confusion for your staff?
Why do employees often perceive that their salary is “too low” when their employer has taken great pains to ensure that they are paying their staff a competitive wage?
As an HR Consultant, one of the most common concerns employer’s express to me is why the salary figures their employee’s find on sites such as salary.com is usually much higher than data that they were provided by the County and/or published salary survey’s.
Accordingly, this apparent disparity between what employee’s think they “should” be paid and what their employer is “actually” paying creates a perception that they don’t pay a competitive wage, that they are being somehow disingenuous when they set pay ranges and that, in some cases, they’re experiencing issues related to poor morale and higher turnover that they believe are rooted in their compensation practices.
Salary Report Disparities
The reasons for these disparities is easy to understand once you log onto the salary.com website and realize to what extent the salary data they provide is based (in large part) on a plethora of self reported information. With questions such as degrees held, the reputation of the college or university attended, ratings on performance reviews, expected merit raise(s) and/or bonus award(s) it’s evident that their calculations are heavily influenced by factors that, in the real world, have no correlation to what employer’s in San Diego are actually paying someone in that same role.
In order to determine what impact the self reported information might have in the salary data provided to the user, I recently created two profiles on Salary.com. While my answers to biographical questions and career facts were consistent in both profiles – such as age, years of experience, degrees held and residential zip code, I intentionally manipulated other information – such as giving the university I attended a “Superior” rating in one profile and an “Average” rating in the other. The end result was that one of my personal salary reports had a base salary figure that was 16.4% higher than the second report.
While the exact salary data this particular online portal utilizes is not disclosed on their website, they do allude to “a team of compensation specialist’s” that are behind the scenes; although, the fact is these types of sites are “for profit” with a $29.95 fee for a personalized salary report. Like any business, if the customers are not satisfied with the results, the business will not grow nor thrive. Consequently, it’s important to remember that these personalized salary reports are only as valid as the information that was put into the system. In other words, “if you put garbage in, you get garbage out.”
Company approaches to ensuring competitive pay practices.
From my professional perspective, there are really only two things that go into determining what the base salary should be for each position within your organization. The first and foremost data point is “what are other companies within your industry of a similar size, age and profitability within your city or region are paying for each position?” Once that data has been calculated and obtained, the second critical factor to consider is internal equity.
All too often the topic of internal equity does not come up until late in an organizations development; however, the sooner a company can establish a compensation philosophy and develop salary ranges that take into account both external data points and internal equity issues the sooner they can establish salary ranges that ensure competitive pay practices are in place.
For a virtual clearing house of information on competitive pay practices and total compensation awards, I’d highly recommend that you check out “The World at Work”.
Mike Russell is a seasoned professional with three decades of experience in the fields of HR and OD. In addition to having a career trajectory of HR Generalist to a VP within ten years, Mike also has a long and successful background as a Consultant/Business Partner to CEO’s, Presidents and Executive Directors in both the private and non-profit communities across a wide spectrum of industries.
As the sole-proprietor and owner of Organizational Development Solutions (ODS), Mike partners with business leaders committed to insulating their organization(s) from potential liability, increasing organizational effectiveness and adding shareholder value.
To contact Mike please send an email to firstname.lastname@example.org