WEEK EIGHT CHAPTERS 8?
Specify Competitive Pay Policy
o Lead the market with respect to pay
o Match average pay of competitors
o Lag behind average market pay rates
Surveys provide the data for translating policy into pay levels, pay mix, and structures
A compensation survey is the systematic process of collecting and making judgments
about the compensation paid by other employers
Can be done in-house or by consultants
The Purpose of a Survey
Adjust pay levelhow much to pay?
o Based on overall movement of pay rates caused by competition in the market
Adjust pay mixwhat forms?
o Base, bonus, stock, benefits
Adjust pay structure?
o Validate job evaluation results; establish internal structures
Study special situations
o Specific pay-related problems
Estimate competitors labor costs
o Competitive intelligence
Select Relevant Market Competitors
Relevant labor market includes employers who compete:
o For same occupations or skills
o For employees in same geographic area
o With same products and services
o Organizations with unique jobs and structures find it hard to get comparable
o Place more emphasis on external market data
Design the Survey
Who should be involved?
How many employers?
Which jobs to include?
What information to collect?
Interpret Survey Results
Statistical analysiso Frequency distribution
Unusual shapes may reflect:
Problems with job matches
Widely dispersed pay rates
Employers with widely divergent pay policies
o Central tendency
The degree of match between the organizations jobs and survey jobs must be carefully
assessed on job content rather than on the basis of job title only
Interpret Survey Results and Construct a Market Line
Verify data for accuracy and match
o Accuracy of match
Benchmark conversion/survey leveling
Does any one company dominate?
Do all employers show similar patterns?
Combine Job Evaluation & Market Survey Data
two pieces of data on each benchmark:
o Survey data dollars