Looking to Benchmark Pay?
SUMMARY
Developing, analyzing and using compensation surveys brings an invaluable source of data to the compensation function. Organizations use compensation surveys as the measurement of the external labor market. It is your market intelligence!
Sources
External market data may be obtained from a variety of sources, but it is important to ensure that the data is highly regarded and applies to your organization. Survey sources can be obtained as follows:
- U.S. government
- Internet data
- Published salary surveys
- Survey software databases
- Computer data banks
- Conduct (or sponsor) a custom survey for your own organization (Note: the FTC Survey Safe Harbor Guidelines should be considered.)
Fortune 500 companies will typically participate in and use published salary surveys, survey software databases and computer data banks to make their compensation decisions. Highly regarded sources to assess the external marketplace are important for key compensation decisions.
Survey Development
Given the importance and common use of compensation surveys, planning their design and use is of great importance. Developing a compensation survey consists of making a series of decisions on:
- the purpose of the survey
- what jobs to include
- what markets and organizations to survey
- what information to survey
- how to obtain the information
The Most Important Issue – Job Comparability
The major issue with compensation surveys is the comparability of the organization's jobs to those being surveyed. It is difficult to ensure this comparability in any way other than analyzing the jobs in the organizations being surveyed.
No One Way to Analyze Data
While the process of collecting data through compensation surveys is well defined, the analysis of the data is done in a variety of ways. Every organization uses its own compensation strategy to design and develop its compensation program.
Online Market Data
Today, external market data is readily available online. Employees are now very knowledgeable about what the labor market pays for their job, so it is more important than ever that Human Resources professionals are well-versed in compensation survey data. A company’s commitment to pay market competitive compensation goes a long way in its ability to hire, retain, and motivate an engaged workforce.