Module 3/4 30 min
Market surveys, pay increases and communication
Step 1 / 4·Reading a salary survey: what percentiles mean
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Learning objectives — after this module you will:
- Read and use salary survey data by percentile correctly
- Design a merit matrix linking performance and compa-ratio
- Communicate pay decisions transparently
Learn ~8 min
Reading a salary survey: what percentiles mean
Use market data correctly instead of misreading it.
Salary surveys report data by PERCENTILE, not by average. P50 (the median) means half of companies pay less than this and half pay more. P75 means you'd pay more than 75% of the market.
The most common mistake: using the AVERAGE instead of the median. Averages get dragged up by a few very high payers — leading to the wrong conclusion that you're underpaying.
Four rules for using survey data properly
- MATCH ON JOB CONTENT, not job title — a 'HR Manager' at two companies can differ completely in scope
- Pick the right comparison set: same industry, size and location — don't compare a 50-person firm to a 5,000-person group
- Use the MEDIAN (P50), not the average
- Check how old the data is; anything over 12 months needs adjusting for market movement
Key takeaway: Match on job content, pick the right comparison set, and always use the median rather than the average.