Q: What's the best way to determine a hiring salary to offer a candidate? I used to ask applicants for their salary history, but I'm hearing that some states and cities are making that illegal. What should we do to offer a fair but competitive salary?

A: It's too bad that it's taking legislation to change hiring-salary practices. Smart employers realize that asking what candidates were paid in previous jobs has kept some employees underpaid throughout their entire careers.

When you ask what candidates made in their last job, you're assuming that their previous employer paid a fair wage, which may or may not be true. What if that employer had a practice of underpaying women or minorities and you then perpetuate the unfairness by basing their new salary on that number?

There is a better way: Determine what the job is worth to your organization. You want to pay a fair wage to compete for the best talent, and you also need to maintain internal equity. That means you have to do some research.

Here are a couple of ways to gather data:

1. Participate in salary surveys in your area. In many cases, you get free access to the survey data if you share your salary information, which remains confidential. These surveys provide benchmarks for determining whether you are offering competitive salaries for positions similar to those included in the survey. ASAE conducts a salary survey that gathers data for more than 70 common association jobs every two years.
2. Check Glassdoor and Salary.com for public information on what jobs are worth. Know that your job applicants are checking these sites as well.

You want to pay a fair wage to compete for the best talent, and you also need to maintain internal equity. That means you have to do some research.

Once you determine what the position is worth in the marketplace and to your organization, don't neglect to review how that salary compares with what you pay current employees who do similar work. This ensures that your organization maintains internal pay equity.

Certainly, your final decision will depend on your salary budget, but it never makes sense to underpay employees, whether they are new or existing staff. If employees feel undervalued, you won't get their best work and you risk losing them.

When you offer a candidate the job, be sure to highlight your total compensation package, including benefits and perks like flexible schedules, which for some employees may offset a lower salary offer than they might get elsewhere. Make sure your entire package is competitive.

Bottom line: Don't ask for salary history. Pay what the job is worth to your organization.

Read More

In "Create a Fair Salary Process by Ditching Salary Histories," published on asaecenter.org, learn about four factors you should consider to help close the pay gap and avoid discrimination in the recruitment process. (ASAE login required.)