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QUESTION: What is the best salary level to use?

 

The Geographic Assessor takes the approach that, since each planning situation may be different, there is no single “one size fits all” answer to this question.  Part of the tool’s flexibility is its ability to provide salary differentials across a wide range of salaries, rather than ERI researchers determining a single level that is best for all situations.

 

There are some strategies that can help answer this question for specific situations.  If you are not using a geographic salary structure and just want a single percentage for each location, then using the average salary for the base location is a good starting point.  For example, using the United States average as the base location, the average salary in the U.S. is currently around $50,000.  That is a reasonable starting point for that analysis.

 

If you are working on a specific structure, then another approach might be to look at a salary toward the middle of the range in that structure.  This minimizes the “distance” between the chosen salary and all the other salaries in the range.  Some companies only have relatively high salaries in their structure, so the program gives them the ability to focus on a higher salary level than that of a company with only lower-paid positions in the structure.  If the structure is broad, then a more complex approach might be to measure differentials at more than one salary point and perhaps combine them, weighting if appropriate.

 

See Using GA FAQ #22 and Salary Structure Variances for more information.