Market Pricing: What Works Best for Setting Your Salary Structure?


Market pricing is the process of setting wage structures based on gathering, analyzing and comparing job salary survey data from wages paid in the external market.

Organizations use market pricing to establish pay structures and rates for jobs that are market driven, such as information technology jobs. Another use for market pricing is to follow market rate changes and then adjust your organization’s rates accordingly.

Many companies are adopting some type of market pricing as a replacement for more traditional job evaluation strategies. Often, market pricing is used in combination with one or more of these traditional job evaluation strategies.

Pure market pricing has certain limitations that are hard to overlook. By using a pure externally based employee-pay scheme, an organization will tend to underplay internal equity. The result is a lack of job parity between positions that would otherwise have similar rank and pay.

So, where can organizations turn for compensation information? There are multiple sources: the Manufacturer & Business Association (MBA), staffing companies, print sources (such as magazines or newsletters), and even competitors.

A high percentage of organizations also purchase salary surveys on an annual basis. They pay for this compensation information because of the benefits derived from it.

It’s also common for organizations to participate in surveys by sharing their own salary data — and getting a percentage discount on the completed survey results. This type of survey (where multiple companies share compensation data) is a standard type survey. As a member of the MBA, if you participate in our Regional Wage & Salary/Increase Survey, you receive the results at no charge!

Keep in mind: The basis of all surveys is to compare what is similar, rather than what is different. It’s important to use multiple sources of market pricing to make your compensation decisions.

For more information on the MBA’s Regional Wage & Salary/Increase Survey, contact the HR Services Division at