So how is this going to work? Pick the highest salary found in the area and add X, where X is a little? I never found the numbers from sites such as 'salary.com' or 'glassdoor' to be very reliable as it always 'depends'.
It is indeed a bit of a fuzzy process. We look at stuff together (ranges from salary.com, other similar job postings), then we agree on what's "a little better than the average". Maybe it means picking 3/4 point in the range...in general, I have found that people have a number in mind that would make them happy...it's a matter of finding it out and making sure it fits within the policy...it's easier to do than to explain. :) So far, those one-on-one where we decide the new level have been fairly easy meetings.
Has this resulted in anyone taking a pay cut yet? Does everyone know what everyone else gets paid (including management)?