What does it mean when HR uses third party surveys to determine pay for a job? -

It usually means they use a commercial service who surveys companies to find out what they pay for a comparable job in order to decide what the competition would pay for an employee they want to hire. It works really well when a job has similar skills across industries. For example, if you are an accounts payable clerk, that job doesn t vary too much in terms of education and responsibility, so if the going rate for A/P clerks is $35,000 a year, that is what a company will usually offer. Or, take auto mechanics who do brakes and oil changes. That skill is fairly similar from shop to shop, so usually the pay will be the same from place to place.Mostly HR departments use these types of surveys for two reasons. 1. to make sure their total pay package (pay plus benefits) is competitive in the market, so other companies don t steal away their employees and so that they don t pay too much for a job. and 2. to defend themselves against lawsuits from employees who say things like My job as a systems programmer is much more difficult as his job as a systems analyst, so therefore I should be paid twice as much. The company can point to these surveys and respond All systems programmers in this area earn an average of $x per month, and you are within 10% of that number, so we believe you are fairly paid.