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What is a salary band and why companies share yours

Disclosure of wage / salary range by employer

Washington state requires employers to disclose the salary range for an open position. The goal of this disclosure is to minimize employee pay inequity and specifically directed toward helping women. I suspect the trend will continue throughout the rest of the states.

Even if your state does not have pay transparency, your manager and HR department use some version of a salary band to determine your compensation. For most states, these bands are “confidential.”

I understand and appreciate the intent of this move. I have seen inequities in pay. The flip side is that I believe that passing this law is only part of the solution. Without education, passing a pay transparency law will hurt employers and employees. This law has the potential to hurt those it is trying to protect. This is the second post on this topic. Over the next few posts, I want to provide information on both sides so you can be paid equitably. The first post is titled Salary Range.

What is a salary band?

A salary band delivers a salary “range” for a specific role, within a particular industry, and, for a specific company size. Salary bands are data points that triangulate to the salary range. Salary bands are not a one size fits all. The title in a large company can pay very differently in a smaller company or industry. 

Common data points included in a salary band include:

  • Title
  • Who the position reports to
  • Job description and responsibilities
  • Education requirements
  • Years of individual contributor experience and or management experience
  • Location of the work. (A Nebraska employee should not be paid the same as an employee in New York City)
  • Revenue the company is generating. A company generating more revenue can usually pay more.
    • A small non-profit probably won’t pay as much as a larger for-profit company. Likewise, a for-profit may not pay as much for the same role in a different industry. 

What does a salary band look like

The above data creates the following salary band. There will be multiple salaries for companies representing the 25th Percentile, 50th Percentile, and 75th Percentile. The difference between the listed salaries is “the salary range” for that given role. 

Job Title Here

25th Percentile 50th Percentile 75th Percentile
$45,000 $52,000 $59,000

Let’s say you are earning $45K annually with your specific title. You see the above job opening and are thinking a few things:

  1. I am underpaid for this job title
  2. I can change jobs and get a raise
  3. My manager is not paying me enough. 

Most candidates expect to be paid closer to $59K. Ninety percent of employees think they are in the top 10%. The range represents different levels of experience for the same title. An employee who is junior in the position would be paid closer to the 25th percentile. A person with the same title and more experience would be paid higher in the range.  

My explanation for ranges within a salary band

 I may have a black belt (the title) in martial arts. But there are PLENTY black belts (same title) out there that can kick my ass blindfolded. You could tie one hand behind their back, and I would be thrown around like a rag doll. These black belts have the same “title” (in the form of a black belt.) They also have different levels of experience. I am not their equal. I am the most junior black belt in the room. If I were assembling an army of black belts, not all would be equal. It wouldn’t be fair to give all black belts the same pay.

I don’t want to argue with a pissed-off black belt

If I pay someone who has held a black belt for five years the same amount as the person who just received a black belt, the 5-year practitioner would feel cheated. I don’t want to cheat a black belt. Not all Directors are created equal. A Director with five years of experience should be more effective than someone recently promoted. (Being accused of paying similar titles different amounts happens all the time at all levels.)

Over the next few posts, I want to keep you from embarrassing yourself in front of your manager, HR, and peers. Just a few scenarios I want to help you avoid (which HR sees regularly):

  • Employee pulls multiple salary surveys from online sources.The employee takes the survey with the highest number, and marches into HR or the manager’s office while waving the survey in the air. With a condescending tone, they slap the survey down on the desk and exclaim, “HRNasty, you are cheating me. You are not paying me enough!”   (In HR circles, this is a CLM, aka Career Limiting Move.)
  • “My friend works at Google, IBM, or Amazon, and they make so much more than I do! Pay me more!” (Try and get a job at Google or IBM)
  • “I have title X, Glassdoor says I should be paid more!”

HR is the culprit

Yes, employees have come to me full of righteousness. Explaining how I am cheating them, trying to pull a fast one, and being unfair. Usually, it is blustery men who are not qualified for the proposed adjustment. I realize I may not be hearing from women because:

  • Women may feel uncomfortable coming to the head of HR, who is a man
  • Complaining about anything will be perceived as being “hard to work with”.

I hope it is because we pay fairly. Working on a diverse team helps as well. Diverse teams are important for several reasons. One of the reasons is approachability. With representation on the team, employees can find someone they feel comfortable talking to.

HR is to blame

When people learn I work in HR, I am often accused of: 

  • Not paying them enough
  • Responsible for inequity in pay
  • The person that isn’t hiring enough minorities

I am not their HR person. They are ranting at the profession. I understand the perception and the sentiment. 

My intent

I am not denying women are paid less. There are plenty of studies that present the data and prove the point. Yes, I have seen it happen. I coached Mrs. HRNasty on how to avoid pay discrepancies. My goal with these posts is to provide perspective. There are two sides to this coin.

  1. We can blame the system. We can bitch and moan that the system isn’t fair.
  2. We can take control of our careers and turn the game upside down. 

Yes, it is unfair, but it is our career, not our managers. I will provide both sides of this dilemma so you can decide how you want to respond. I want to give you options so you don’t have to be a casualty. 

Can you earn more than your salary band?

It is a lot easier than you think. Just a heads up, making demands of HR or your manager isn’t the way. Subscribe and learn how to pull a “nasty” move on your HR department over the next few posts. It will boil down to one of my mantras:

It’s not what you say, it’s how you say it.

Stay tuned, and see you at the after-party,

HRNasty

nasty: an unreal maneuver of incredible technique, ridiculously good, tricky, and manipulative but with the result that can’t help but be admired, a phrase used to describe someone good at something. “He has a nasty forkball.”

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