Salary Health: How to Find Out If You're Underpaid

by Lydia Dishman, PayScale.com

Pay raises may have hit an all-time low last year, but now there's good news: salaries are expected to increase by an estimated 3 percent in 2010, according to a survey by Hewitt Associates, a global human resources consulting company. That should help ease the minds of employees frustrated by delayed or nonexistent wage increases.

Are you due a raise? Is your employer paying you less than you deserve? There are several ways to find out--and get the facts that will help when you're ready to negotiate a wage increase.

Get a number
Stacey Carroll, a human resources professional and instructor at Western Washington University, says to start by understanding your company's pay practices. "Ask if there is a formal salary range for your position," says Carroll, who adds that most organizations will share this information for your particular job if they have a range in place. If not, she suggests asking what factors affect pay. "It's usually performance, longevity, or some combination of the two," she explains. She recommends asking for specific examples of exceptional performance that the company has rewarded in the past.

Use professional tools
Ed Rataj, managing director of compensation consulting at CBIZ Human Capital Services, says that in addition to individual factors such as performance and experience, most organizations use salary survey data to determine competitive market rates for a job. "From there, they will determine appropriate entry-level pay, fully competent pay, and the maximum value of the job," he says.

Carroll points out that this information is not top-secret, but she cautions against relying on surveys. Information provided by the U.S. Bureau of Labor Statistics or a private entity such as online salary database PayScale.com can be more accurate because they take into account your geographic location, your years of experience, and the size of your company.

Comparison shop
"I encourage employees to double check local data by 'mystery shopping,'" says Jessica Miller-Merrell, CEO of Xceptional HR. Apply for positions that are similar to your current job, she says, or schedule an informational interview. If you have a professional blog, Miller-Merrell says you should "use it to interview and be in contact with prospective companies," to find out about their benefits, corporate culture, and other perks.

Forget the competition
Some companies strictly forbid discussions of compensation among coworkers, while others make salary ranges publicly available. Rataj says to forget about your coworkers' pay levels. "A better strategy is to focus on your own performance and contribution to the success of the organization." Carroll adds, "The more you can quantify and make a case for your contributions, the stronger your argument when negotiating better compensation."

Your bottom line
Carroll reminds dissatisfied workers to look at the big picture. "There's so much more to what makes a desirable job than pay," she says. When you consider your company's culture, benefits, and perks, as well as your managers' commitment to helping you learn and grow, you may just realize that you're better "paid" than you know.

Job Info , Jobs Sources , Career