I always ask hiring authorities and candidates not to “talk salary” on an interview, and here is why:
Hiring Authority: You want the best available candidate for the open position. Keep this the focus of all interviews. It’s OK to ask what a candidate’s current compensation package looks like. This will give you a starting point of where your offer should come in, keeping in mind that no one wants to take a step back or lateral if they don’t have to. Focus on their skill set and ability to add value to your organization. If they are the right fit, you can probably afford them.
Candidates: When asked about salary, it is OK to explain your current compensation plan, but do not state desired salary. This question is a trap and puts you in a no-win situation. If you ask for a number too high, you may scare off the hiring authority or seem unreasonable. If you ask for a number too low, you may have sold yourself short of their salary range. The best response is: “Mr. Hiring Authority, compensation is important, but the opportunity to improve my career path is my #1 priority at this time. I am sure if we get to the offer stage, your offer will be fair.”