Welcome to the third installment of my series on making annual salary adjustments. Last week’s post recommended benchmarking salaries at the entry and star-performer levels of a role. This week and next we’ll look at free online tools that can be used for researching market rates for most jobs. As it is with any tool, the value of work done with these tools is dependent on the skill and knowledge of the user. Today’s post focuses on my favorite, if-you-only-have-time-to-use-one tool.

Step 5: Use a good tool.

PayScale.com. I first found this resource when building my case for requesting a raise. Of course, I wanted a strong case, so I used multiple other sources. PayScale’s pay ranges seemed “just right” – not too high, not too low. This could be the site’s greatest strength: It is a credible middle ground.

Later in my career, I worked for a company that hired a consulting firm to do compensation studies across the organization. When I received the report for me in my role, I was surprised by two things.

First, the consultant’s report was almost entirely from PayScale (with the PayScale logo on nearly every page).

Second, the pay range seemed far too low. After studying the report, I found a mistake in the settings for my profile: The number of years I had with the company was used for my total years of relevant work experience (my tenure was about one-fifth of my experience at the time). I only figured this out by noticing the trend of comparable pay profiles included in the report – these people, whose identities were kept anonymous, all had a few years of any career experience, let alone relevant experience. I pointed out the suspected error and received a new version with a range that was much more reasonable.

Most recently, I used PayScale to build salary bands for several job roles across my current employer’s organization. I had just submitted my analysis when I received a phone call from a salesperson pitching a well-respected and pricey compensation study database. The representative offered to run two of our job positions through their system as part of a demo. I was eager to see how close our numbers were. Their ranges matched my analysis. Thank you, PayScale.

PayScale and resources like it have some limitations. Uncommon jobs are difficult to gauge and most jobs require some trial-and-error testing to ensure the database’s job profile matches the actual work of the role in your company. Beware: Creatively wording job titles significantly skews pay scales. This is why we started with Step 1: Know the work.

Of course, there are other sources you can use. Salary.com offers similar specificity for many jobs allowing you to tune the range based on industry, experience, education and location. But I’ve found the higher ranges provided by Salary.com are difficult to justify. Indeed.com provides free information that is very easy and quick to find. It also reports an index that shows national changes over time but limits customizations.

Next week, we’ll conclude this series with some final considerations for arming your team with information and making annual salary adjustments.

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