A proper altimeter setting is the correct barometric pressure adjusted for the airport height above sea level. The altimeter must indicate the proper altitude and not the barometric pressure. The pilot can set the current sea pressure on the altimeter using an adjustment knob.
The altimeter subtracts the actual barometric pressure at a given location from the current sea-level pressure and expresses the figure as an altitude. The adjustment knob allows the pilot to set the proper altimeter reading in the Kollsman window. The further a pilot is from the source of the altimeter reading, the higher the pilot is from the location of the source.