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About the data in the Salary Wizard
About the Salary.com methodology
The source of the job descriptions and answers in the Salary Wizard should be cited as "Salary.com," since they are the copyrighted work of our team of compensation consultants based on the review of multiple salary surveys, and our own research, analysis, and proprietary mathematical model. Every job in the Salary Wizard has been thoroughly researched and validated by Salary.com's team of compensation consultants who have combined experience of over 40 years in the compensation and statistical analysis fields. Salary.com purchases the most current salary surveys available from well-recognized, reputable compensation consulting firms. This survey data is used for analysis and benchmarking by extracting and reporting the market salary data for each position that matches to one of the jobs reported in the Salary Wizard. To ensure jobs are appropriately matched, our analysts benchmark the jobs based on job content, not job title. Note that all data used in researching salary levels for the Salary Wizard has been reported by human resource professionals. Salary.com does not use any salary information from individual site users, placement agencies, job postings, nor any other sources that would traditionally be characterized as "unreliable" by compensation or human resource professionals. The Salary.com research database includes information on more than 1.3 million incumbents and 5,000 companies. Most jobs in the Salary Wizard are based on 100 or more incumbent salaries. The salary data is presented in two pieces: base pay and total cash compensation (base pay plus annual incentives). The market pay level is based on the median, or 50th percentile, of all salaries reported for a given job. This represents the midpoint of the competitive market rate for that job. To provide perspective on scope and distribution of pay amounts, the Salary Wizard also shows the range around the median that includes the half of the people in that job who are paid closest to the market median – and thus excludes the lowest 25 percent and the highest 25 percent by pay. Results for each piece are displayed in a graph to show visually this "interquartile range." The minimum of the range is the 25th percentile, which means only 25 percent of salaries reported for a particular job fall below this level; the maximum of the range is the 75th percentile, which means 75 percent of all salaries reported for that job fall below this amount (i.e., 25 percent fall above this amount). Although this interquartile range roughly equates to the typical market range for the position, there are a reasonable number of people whose pay is higher or lower than the interquartile range – in fact, 25 percent of those in any given job are expected to be paid above the 75th percentile and 25 percent are expected to be paid below the 25th percentile. Although the data sources we use are the most recent available, there is a lag between the effective data of the salary information they report and today – sometimes more than a year. To recognize that salaries increase faster than studies are printed, Salary.com uses the industry standard approach of modifying the data by applying an aging factor to adjust the data to a common date and to accommodate the movement of salaries over time. Not all salaries move at the same rate. For instance, in the last few years, salaries in the information technology field have increased much faster than salaries in other jobs (5 to 15 percent for IT versus 2 to 5 percent in general). Therefore, IT salaries are adjusted at a higher rate than non-IT jobs. Geography For entrepreneurial organizations siting business in new areas, Salary.com is sometimes the only available source of compensation information. Salary.com's geographic adjustment factors provide a good approximation of a fair pay range for a given job regardless of how many people have that job today. This research can be very useful in determining the value of a job that has not been offered in a given area before. For example, if a new factory is opening in a rural area, there might be no comparable pay information for many of the factory worker jobs, but they nevertheless need to be filled. Without estimations like those used in the Salary Wizard, neither the entrepreneurs nor the potential employees would have a source of fair pay data. It would probably be well over a year before that data became available. In fact, the data might never be published in a conventional compensation survey if the new factory were the only such employer in the area. We periodically compare our geographic adjustment factors to actual market data for given geographies to ensure that our adjustment factors reasonably reflect the market. As we find a geographic area speeding or slowing relative to the national market, we modify the adjustments for that geography and review the surrounding geographies for similar potential adjustments. Job Titles Note that if a job description is a "pretty good" match but not perfect, the differences in the skills, experience, and knowledge could translate into a difference in market compensation. Keep this in mind when reviewing the numbers presented in the Salary Wizard. There are two important cautions to remember when comparing a job description to a job descriptor in the Salary Wizard. First, be honest about the skills and abilities of the person whose job you are reviewing, especially if it's your own – for example, being able to use a spreadsheet doesn't make someone a programmer. Second, if a person has skills greater than those required for the job, it is important to assess whether those added skills are of added value to the company.
Furthermore, the Personal Salary Report and Job Valuation Report may be used to account for differences in estimated market value arising from personal attributes such as years of experience, performance, education, and other compensable factors known to have some influence on an individual's pay. In contrast, the Salary Wizard's free answers are based on salary values averaged across survey responses from all company sizes, all industry types, and all locations, and offer no personal customization. The Salary Wizard applies a geographic adjustment factor based on the city or ZIP code specified in order to give users an initial sense of local market conditions and to give some confirmation that the correct job title and description have been selected. To ensure comparability between the free and premium products, each Personal Salary Report and Job Valuation Report includes a chart showing how differences in pay arise as data is scoped to reflect specific locations, company sizes, and industries.
Please remember that most companies do try to compensate their employees fairly - being lower than the market numbers shown does not necessarily mean you are "under paid." Half of the people in a given job are paid below the median and 1-in-4 is below the 25th percentile. Recent
promotion to new job Companies often compensate newly promoted employees at lower salary levels than the levels of pay for incumbents with the typical experience for that particular position. The rationale is that as a new person at a given level, you probably have less experience and value in that role than the typical incumbent has. As time passes and you become more proficient and experienced in this new position, your pay likely will move up to the typical level for the job. Lesser
job responsibilities Matching your job to the most appropriate position in the Salary Wizard is crucial in obtaining the correct market salary data. To ensure that you are making an accurate comparison, please review the job description provided by the Salary Wizard and make sure that it closely reflects your own job. (If you don't currently have a job description, you may want to contact your human resource department.) You may also want to look for a job title that has slightly lesser responsibilities than the one you've selected in the Salary Wizard - you may find that this job description more closely matches what you do. Limiting
pay grades and pay structures Often, companies incorporate pay grades or pay structures to determine appropriate levels of pay for individual jobs. These structures help assure that people are paid fairly compared to others in the organization. If you are currently at the top - or above the top of your particular pay grade, your company has very limited options with regard to increasing your current compensation. As a result, even though you may be at the top of a particular pay range within your company, your pay may be lower than the salary market data in the Salary Wizard for your particular position. A company
that pays lower cash and higher benefits Companies sometimes provide conservative cash compensation levels in conjunction with aggressive benefit packages and/or long-term incentive grants (e.g., stock options). For example, Internet startups often compensate their employees with low cash compensation and large stock option grants. Similarly, educational organizations often compensate their employees with low cash compensation and generous perquisite and benefits programs. If your current cash compensation is below the salary market data in the Salary Wizard, you may want to review your entire compensation & benefits package. You may be surprised to discover the breadth or value of the benefits your company offers. Small
company The Salary Wizard data represents the typical person in a job. This data is based on incumbents from companies of all sizes. Not all salaries are closely related to the size of the employer, but sometimes it is a consideration. It is most common for the size of the company to influence the pay levels of more senior employees. If you are looking at a management or an executive position, the size of the company is one key measure to determine pay levels. Senior people in small companies, under normal circumstances, often earn less than the salary market data in the Salary Wizard because the scope and responsibilities are less than his/her typical peer. Middle level positions within a company are also impacted by the size of the company, but to a lesser degree than executives. Clerical and lower level positions are, as a rule, affected only slightly. Regardless of your role in the company, a small company may have revenue or cash flow restrictions that affect the payroll. Low-paying
industry The Salary Wizard data represents the typical person in a job. This data is based on incumbents from companies of all industries. Not all salaries are closely related to the industry of the employer, but sometimes it is a consideration. It is most common for the industry of the company to influence the pay of senior employees and those whose skills are less transferable to other industries. If you are looking at a management or an executive position, the industry is very relevant to how much you're paid. For example, senior people in the manufacturing industry historically have been paid lower than people with comparable jobs in the financial sector. If your industry is a high paying one, you may expect your pay to be higher than the salary market data in the Salary Wizard, whereas if your industry is a lower paying one, you may expect your pay to be lower than the salary market data in the Salary Wizard. Middle level positions within a company are also impacted by industry, but to a lesser degree than executives. Clerical and lower level positions are, as a rule, affected only slightly. Less-than-expected
performance Simply stated, most companies will compensate employees who are below-average performers with below-average compensation. If your performance has been assessed as unsatisfactory or below established performance goals, or if a review has not been performed recently, your salary could be below the salary market data in the Salary Wizard. If your performance is not up to the organization's expectations, you should be sure to discuss those expectations with your manager to make sure you understand what is expected and what you can do to improve your performance and, ideally, increase your compensation. Other
Please remember that being higher than the market numbers shown does not necessarily mean you are "over paid"; half of the people in a given job are paid above the median and 1-in-4 is above the 75th percentile. Long
tenure or proximity to promotion Often, incumbents who are strong performers and have been in the same position for extended periods of time, will master the responsibilities along with the concepts and practices of the position. They are performing on a higher level than the typical person with the same title. As a result, they are often paid accordingly - which could be well above the levels of a typical person working in that same job. Also, some companies expect employees to work at the next level before they can be promoted to that level. In some of these cases, salaries are increased - in part or in full - prior to an actual promotion. Greater
job responsibilities Matching your job to the most appropriate position in the Salary Wizard is crucial in obtaining the correct market salary data. To ensure that you are making an accurate comparison, please review the job description provided by the Salary Wizard and make sure that it closely reflects your own job. (If you don't currently have a job description, you may want to contact your human resource department.) You may also want to look for the job title that has slightly greater responsibilities than the one you've selected in the Salary Wizard - you may find that this job description more closely matches what you do. Greater-than-expected
performance Simply stated, most companies will compensate employees who are above-average performers with above-average compensation. If your performance has been assessed as excellent or above established performance goals, your salary could be above the salary market data in the Salary Wizard - and you've earned it. Company's
compensation philosophy In today's current economic environment where unemployment is low and companies are competing for talented individuals to meet their staffing needs, some companies are paying larger compensation amounts to attract and retain employees. The philosophy is to pay top quartile salary to get and keep top quartile performers. Some companies will outwardly state this, while others will just quietly do it. Large
company The Salary Wizard data represents the typical person in a job. This data is based on incumbents from companies of all sizes. Not all salaries are closely related to the size of the employer, but sometimes it is a consideration. It is most common for the size of the company to influence the pay levels of more senior employees. If you are looking at a management or an executive position, the size of the company is one key measure to determine pay levels. Senior people in large companies, under normal circumstances, often earn more than the salary market data in the Salary Wizard because the scope and responsibilities are greater than his/her typical peer. Middle level positions within a company are also impacted by the size of the company, but to a lesser degree than executives. Clerical and lower level positions are, as a rule, affected only slightly. High-paying
industry The Salary Wizard data represents the typical person in a job. This data is based on incumbents of companies from all industries. Not all salaries are closely related to the industry of the employer, but sometimes it is a consideration. It is most common for the industry of the company to influence the pay of senior employees and those whose skills are less transferable to other industries. If you are looking at a management or an executive position, the industry is very relevant to how much you're paid. For example, executives in the manufacturing industry historically have been paid lower than executives in the financial sector. If your industry is a high paying one, you may expect your pay to be higher than the salary market data in the Salary Wizard, whereas if your industry is a lower paying one, you may expect your pay to be lower than the salary market data in the Salary Wizard. Middle level positions within a company are also impacted by industry, but to a lesser degree than executives. Clerical and lower level positions are, as a rule, affected only slightly. Hot
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