In its Small Business Questions & Answers section, CNNMoney.com suggests one way to fairly set employee salaries is to rely on third-party salary surveys.
Why? Because relying on independent standards, like a third-party salary survey, (1) gives you credibility, (2) minimizes emotional roadblocks by depersonalizing the issue and (3) provides a good-faith basis for your position.
As the article points out, you should evaluate the salary survey (or other market value determinant) to verify its relevance. Consider whether it is a representative sample based on its numeric size, geographic area and/or time frame.
And be prepared to counter unfavorable criteria proffered by your counterpart. In addition to those mentioned above, consider these tactics: (1) distinguish your item from the market by focusing on its uniqueness; (2) highlight market changes that call into question the validity of your counterpart’s market analysis; and/or (3) focus on other favorable independent standards such as tradition and precedent.