Some notes from the trenches…
I used to get just as upset as the OP and others about employers asking this question. I also used to get upset when I found out that employees in similar jobs/skills were paid more, even if they have less experience.
Now it is water off a ducks back…
I have gotten much better at negotiation. Much MUCH better.
If you are not in a bargaining position (unemployed and desperate, hate your job and must leave etc.) you have weak bargaining postion and will not do well.
This question is now actually a positive to me. If it’s on an application or requested not-in-person, I never answer directly but say it is negotiable based on duties, responsibilities, situation and market salary data.
If you are in a stronger position and are asked this question in person then it provides information about the company. If it is one of the first questions asked, then saving money for the company is a top priority. The company is probably weak financially or overly concerned with getting a ‘good deal’. The sooner they ask the question, the more this is true.
I downgrade a company if they ask this question before serious interviewing has begun. I want to work for a company that does not have to put employee salary cost savings so high. I want to work for a company that wants high performance and is willing to pay for it. If they call you and ask this question, it puts up SERIOUS FLAGS. They must value low employee costs so much that they don’t even want to waste time scheduling an interview! The salary will not be competitive.
If asked this question in person (or on phone) I never dodge it. I give my salary immediately. I then follow up with…
‘My current salary is $x. However, A main reason I am looking for a new position is because I wish to have duties and responsibilities that give me a higher impact into the company’s wellbeing. According to salary.com (or equivalent) the median salary for this position in this area is $y with a one standard deviation range being $r to $t. A salary of $m would be within this range and therefore assure you a reasonable cost and also assure me that the position will fit my need to have a greater impact into the company’s business. Do you agree?’
Something like that. It works wonders for me because it allows an informative and rational discussion about salary. It also allows me to ‘express concern’ that the position is not a higher impact position if their inital salary is too low. I can then say that the position is not a good match and that I should continue to stay with my current position since they have about the same impact into the company and that I am happy with my current employer (strong bargaining position).
I actually have had companies not equate job duties==money and try to convince me that the impact of the position is much greater than my current company even though the salary is about the same! This brings up questions on my part about the company’s financial wellbeing/stability etc. Almost all hiring people know exactly what you are talking about though.
I’m not sure if I am explaining well but hopefully you get the gist. It is a negotiation. If you have a strong position (don’t need the job) you will do well since they have to reward you to get you to leave. If you have a weak position (unemployed and low cash, hate job) then you will not do as well and must market yourself lower.