Adding Salary Ranges To Internal Job Postings

HR Magazine, August, 2000 by Patricia A. Rouzer

This simple change helps HR weed out inappropriate candidates--and demonstrates your competitive salaries to employees.

Should you include salary ranges on in-house job postings?

Yes, according to compensation specialists and HR professionals. Otherwise, you risk raising employee suspicion and looking like you're out of touch with the pay of your competitors. Inclusion of the salary range in the position description serves several useful purposes, experts say. It can:

* Indicate the position's level of responsibility.

* Reduce the number of unqualified applicants.

* Contribute to an atmosphere of openness and trust.

* Demonstrate that wages are competitive.

Conversely, a reluctance to post salary ranges may indicate an inferior compensation system or a lack of trust between employees and management. And given that employees now have access to plenty of information about the pay of competitors, lack of openness about pay ranges may dishearten internal candidates.

"In the current business climate, not posting salary ranges is the equivalent of corporate suicide," says Karen Larson, HR director for the Richmond, Va., Times-Dispatch and former manager of strategic program development for CSX Corp., a Fortune 500 transportation company. "It conveys so many negative messages to both employees and outside job applicants.

"If a company has a sound compensation system, if they communicate well with their employees and they are in synch with the market data for their region, they will truly be competitive and have every reason to post salary ranges internally," says Larson.

Weed Out Inappropriate Candidates

The first benefit of posting salary ranges is that it can help employees determine whether they are qualified to pursue the job. Ranges that are higher or lower than their current salaries can give employees an indication of whether the job responsibilities fall inside their career path.

"In large companies, people may not have an accurate idea of salary ranges for positions, particularly if they are considering a job in another department. By giving them a salary range, you give them some idea of where the position fits in," says Gary B. Omura, managing principal of Omura Consulting, a Los Gatos, Calif., firm that specializes in compensation issues.

By reducing the number of unqualified internal candidates, HR and hiring managers don't waste time fielding calls from or interviewing poor candidates, says Larson.

"You want to give people enough information so that they can self-select themselves into a position, and a salary is certainly part of that process," says Joseph F. Kager, CCP, managing consultant of POE Group Inc., in Plant City, Fla. "A job title and a basic description doesn't necessarily tell you where a position stands in the company's hierarchy."

There is no set management level at which you should stop posting salary ranges on internal job openings. But when managers' stock options, profit sharing and other compensation add-ons become significant, including salary ranges loses its point because the salary range is an inaccurate measure of the job's actual compensation.

"It is always appropriate to give a salary range for positions up to lower to middle management if the organization truly believes in providing internal career opportunities for its employees," Omura says.

Drop the Mystery

Posting salary ranges goes beyond including a few numbers with a job description, Larson says. Posting ranges is "a public show of trust" in employees and demonstrates that the employer values them and will help them advance. That show of trust builds morale, and companies with good morale attract and retain good people, she adds.

"Not posting salary ranges creates an air of mystery that is not beneficial. It generates confusion and distrust, wastes time and ultimately costs the company a lot of money," says Larson. It also, "raises the question, 'Why won't the company tell me?' in the minds of employees," she adds. "That kind of suspicion and distrust leads to high attrition rates," which hurt an employer's bottom line.

"Salary is about the job, not the person," says Kager. Employees understand that fact in "companies that communicate well. A company's openness about compensation is a direct reflection of its relationship with its employees," he says. "It doesn't matter whether a company employs 35 people or 10,000 people. These kinds of communications aren't size-dependent, they are trust-dependent."

Don't Underestimate Employees

Eliminating mystery about salary ranges also is smart because employees probably already have a good idea of what competitors pay and what their co-workers make.

"Anyone with a computer can go to the Internet and get a very accurate idea of what a position is worth in today's highly competitive job market," says Susan K. Schalbe, HR director for Sonoma Systems, a technology firm in Marina del Rey, Calif.

"Employees assume that you are trying to hide something or that your salary scales are not competitive," says Schalbe. She has worked in a variety of industries such as entertainment, publishing, aerospace, banking and technology and says people generally know what is fair compensation within an organization. She adds, "In companies that don't supply salary ranges, that decision is often made by senior executives whose thinking is a product of an earlier time," when executives regarded any employee salary information as personal.