clarkbw, regarding your self-assessment proposal: I have a book (Maverick! by Ricardo Semler) that describes a much higher stakes version of what you're proposing: at the Brazillian company Semco, most of their senior staff set their own salaries!
Apart from modesty and peer pressure, they have a very real incentive to keep it realistic: the easiest way to solve a budget problem is to get rid of someone drawing an excessive salary! They found that most people set realistic salaries, and of those that didn't all but one set a salary lower than expected.
Anyway, the book is a fascinating read even if you're not into management theories. (I'm not: I picked it up on a whim in a bookshop one day, then realised I had been standing there reading it for over 20 minutes, so I bought it). The book is about 10 years old, it would also be interesting to know what has changed since then.