17. Changing the organization size type

QUESTION: For executive compensation analyses, can I change the organization size from revenue to fiscal year budget?

The organization size dimension is fixed. The size dimension built into the software is based on the position, the industry and the area selected.

Not all jobs report wages by the size of the company or organization. For example, wages for an Electrical Engineer are reported by years of experience and not the size of the company. On the other hand, higher level jobs tend to report wages by the size of the organization. For example, the compensation of a Chief Executive Officer is reported by the size of the company and not by years of experience.

For jobs with wages reported by the size of the company, the software utilizes one of three possible company size dimensions. These are revenues, assets, or fiscal year budget (FYB). The manner in which data for a particular industry is gathered determines which of the three size dimensions is utilized. For example:

1. If the majority of industry data is gathered by the company size dimension of revenue, then revenues are used by the software as the size dimension for the industry.

2.	If the majority of industry data is gathered by the company size dimension of assets, then assets are used by the software as the size dimension for the industry.

3.	If the majority of industry data is gathered by the company size dimension of the fiscal year budget of the organization, then the software utilizes fiscal year budget as the size dimension for the industry.

If you have selected an industry which is based on revenue (sensitive to organization revenue size), then you will only be able to view data based on revenue. If you have selected an industry which is based on assets (sensitive to organization asset size), then you will only be able to view data based on assets. The same would be true for fiscal year budget. Whether or not a job is reported by organization size or experience cannot be changed by the user.

Most executive positions (Director level and above) are reported by one of the three organization size dimensions, while most non-executive positions are reported by years of experience. This generality is based on the fact that higher level jobs tend to pay more in larger companies. One could safely assume the CEO's responsibilities for a 100 million dollar company are greater than the CEO's responsibilities for a one million dollar company. Thus, one would expect the compensation for the CEO of a 100 million dollar company to be higher than the compensation of a CEO of a one million dollar company.

However, most non-executive positions (below Director level) are reported by years of experience. For example, accountants with the same job description, the same experience and the same job performance will (as a group) tend to have comparable salaries which do not seem to significantly increase or decrease as a function of company size.

The area selected may also have an effect. When using the Consultant or UK/EU edition of the Executive Compensation Assessor® (XA+), for example, the "size" parameter may be "turnover."