Why Do We Survey and Report Salary Ranges?

A debate with a would-be client last week reminded me of a particular pet peeve, so I thought I’d trot it out here for discussion. (The would-be client is probably moving on to find herself a less combative consultant, but that’s a story for another post…)

Many salary surveys routinely collect and report salary range minimums, midpoints, and maximums. My question is: How is this information useful?

Even if you know how representative those ranges are of the overall set of pay practices (some surveys tell you the number/percent of companies reporting ranges, many don’t), you have no way of knowing:

  • Which companies reporting salaries for the position also reported ranges (is it the higher paying ones or the lower paying ones?),
  • Is it the degree to which those ranges reflect actual underlying salary practices at the companies that reported them; or.
  • How well-designed or up-to-date those reported ranges actually are?

Even worse than the fact that they deliver little to no helpful information – to my mind – is the fact that they seem to invite mispractice, particularly among survey users who don’t have much training or expertise in compensation. How many users simply lift the average salary range minimums, midpoints, and maximums from the survey for each position and implement them as their own? Quite a few, I am here to report.

Weigh in please, readers. Is there something useful that can be gleaned from survey salary range data? Or should we raise a call for its abolishment, before it leads more people astray?

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Your thoughts?

Ann Bares will talk about A Look at How We Reward the Work of  Today — and Tomorrow at TLNT’s Transform conference in Austin, TX Feb. 26-28, 2012. Click here for more information on attending this event. 

This was originally published on Ann Bares’ Compensation Force blog.

Ann Bares is the Managing Partner of Altura Consulting Group. She has over 20 years of experience consulting in compensation and performance management and has worked with a variety of organizations in auditing, designing and implementing executive compensation plans, base salary structures, variable and incentive compensation programs, sales compensation programs, and performance management systems.

Her clients have included public and privately held businesses, both for-profit and not-for-profit organizations, early stage entrepreneurial organizations and larger established companies. Ann also teaches at the University of Minnesota and Concordia University.

Contact her at abares@alturaconsultinggroup.com.

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2 Comments on “Why Do We Survey and Report Salary Ranges?

  1. I would not abolish surveys. They are a useful tool to build an HR budget without going the full way of hiring a Comp&Ben Consultant. They can be used to evaluate a recruiter’s estimate. And if the survey is good they avoid horrendous time wasting by HR/Line management in understanding the salary dynamics of candidates. The survey is as good as the data that is inside it and the only way to avoid spikes and anomaly is to have a solid statistical model, with a large survey base and cross checks to ensure consistency.

    1. Hey Edoardo – I would never advocate abolishing surveys.  I am only questioning the particular practice of gathering and reporting salary ranges, in addition to actual salary levels.  Actual salary data from surveys should be the foundation on which you build your own salary ranges that fit your organization and pay objectives.  Simply lifting the “average salary ranges” for a job from surveys -without going through the important step of defining and building your own salary structure – is a poor practice.  I am simply advocating for focusing on the most useful and meaningful data.  Thanks for your comment!

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