Managers and HR professionals often get cornered by employees who have just discovered some online survey data that proves they’re underpaid.  Yup, the stuff that was once very secret is now very public.  And, since we have no clear basis to reject the idea – at least not one the employee will accept – we become uncomfortable and pressured to “do something” about the new finding.

Having faced this very situation more than once, let me suggest a simple solution:  develop and communicate quality standards regarding any information that is used in market pricing a job.  (Market pricing simply refers to the art/science of determining the external value of a given job.)

Quality standards for market pricing should include at least these questions:

• What is the source of the data?  Was it put together by professionals or is it a summary of individual entries – by anyone who has an internet connection?
• How many companies and incumbents are represented?  If you’re going to recommend increasing pay for anyone, your data should represent the general market.  (Hint: 2-3 companies or a handful of employees is pretty weak!)
• What is the effective date of the data?  The data from some surveys is several months to over a year old.  Reputable surveys will generally display the effective date in the first page or two of their introductory info.
• Are the demographics available?  Are they comparable to our company?  Data with company size (number of employees and/or revenue), type of industry, and my personal favorite – geographic location is much more meaningful than general data summaries.  The better surveys will present these breakouts nicely.

If you answer, “I don’t know” or “No” to any of the above survey quality questions, don’t use it for market pricing jobs.

Communicate your quality requirements to employees.  Encourage new survey sources, but let employees know that all data has to meet the quality standards before it will be given consideration in determining pay for your company.