Magazine article Information Today

PayScale: The Compensation Wiki

Magazine article Information Today

PayScale: The Compensation Wiki

Article excerpt

Question: What do Wikipedia, the YouTube/Democratic candidates debate, and PayScale have in common?

Answer: They are examples of average people taking over things that once only the experts controlled. With Wikipedia, it's information; with the You-Tube debate, it's politics; and with PayScale (, it's money. All three are part of the Web-enabled revolution that's bringing power to the people. It's a profound trend that's controversial, especially for the recently dethroned elites.

Wikipedia and YouTube are well-known. Wikipedia, the collaborative encyclopedia, has become the go-to source for almost any reference question, much to the consternation of traditional encyclopedia publishers. In the YouTube/Democratic debate, regular citizens used YouTube to pose questions to the candidates, bypassing professional journalists who complained that it was amateur hour. In each case, however, the people won. Wikipedia has established itself as a reference standard, and the YouTube questions were pretty good. The elites are on the defensive.

Taking Back Your Compensation Info

Although PayScale is less known than the previous two examples of the Web-enabled revolution, it is doing a similar job for human resource managers, the experts who control the information about our salaries and wages.


PayScale is a large collaborative database of compensation information, developed from individual salary and job profiles submitted by millions of people in all lines of work from the U.S. and around the world. It's the Wiki principle: Information that is widely and carefully gathered from the grass roots is better than that created by a small body of self-proclaimed experts. Of course, the experts don't agree, which leads to lively debates about whose information is better.

Information on compensation--what employees are paid in salaries, wages, bonuses, benefits, etc.--has been traditionally controlled by government agencies and by employers. The Commerce Department's Bureau of Labor Statistics is the principal governmental source for compensation data, which other federal, state, and local government agencies also compile. In the private sector, industry associations, professional groups, and, of course, individual employers maintain compensation data. Much of the data that is compiled by government agencies is made public, and even a lot of private-sector data, particularly that gathered by trade and professional associations (as opposed to individual employers) is also publicly available.

This information is typically presented in aggregates (e.g., average compensation for specific careers, locations, educational levels). This body of compensation information is the foundation upon which employers can assign--and employees can evaluate--compensation packages. The most prominent Web source for this traditional compensation data is (

The New Compensation Paradigm

Joe Giordano, a and Microsoft veteran, launched PayScale in 2002. PayScale is now the most prominent source for new-paradigm compensation data. He wanted to take advantage of the Web as a platform for open, collaborative information gathering and dissemination. The method is simple: You fill out a form with information on your compensation and career, including wages, salary, benefits, position, industry, education, etc. (up to a total of 100 items). Your data is matched with other comparable profiles to produce a report on your status within your peer group.

PayScale provides two reports to the individual subscriber: a free Summary Report and a more detailed fee-based Premium Report. …

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