Compensation_08

Report
Building MarketCompetitive Compensation Systems
Chapter #8
Pay must attract and retain ees
 Four major activities
 Conducting strategic analysis
 Assessing competitors’ pay with pay surveys
 Integrating the internal job structures with external pay
 Determine compensation policies
Step 1. Strategic Analysis
 SWOT
Step 2. Pay Surveys
 Pay
 Benefits
 Childcare
 What do we hope to gain?
 What can we do vs. what do we need to change?
 What to they really want?
 #1
 Career development and advancement opportunities?
Using published survey info
 Professional organizations (SHRM)

World At Work, collects comprehensive info
 Apdx end of chapter page #203
 BLS..gov does salary services about
 1. Wages
 2. Compensation trends
 3. Benefits
find
DOL.gov find BLS

 find
 National Compensation Survey (NCS)
 Compensation Cost Trends (ECI)
 Employer Costs for Employee Compensation (ECEC)
 Look at benefits (NCS)
Occupational Classifications System
Manual
 go to
 www.bls.gov/ncs/ocs/ocsm/commain.htm
 Based on major occupational groupings
Choosing benchmark jobs
 Used as reference points
 Four
 1. contents are well known, stable over time
 2. jobs are common across a number of ers
 3. jobs represent an entire range of jobs being evaluated
 4. jobs are generally accepted in the labor market for the
 Purpose of setting pay levels
 Look #188
Compensation Survey Data
 Be aware
 1.
 2.
 3.
huge amounts of data to understand
data is outdated by the time it is published
use of statistical appropriate analysis
 Central tendency
 Mean scores
 Median score
 Variation


Standard deviation
Updating Survey Data
 Why?
 1. economy forecasts
 2. costs of consumer goods
 . CPI
Consumer Price Index
 Monthly report by BLS www.bls.gov
Integrating internal pay with external
market pay rates
 Regression analysis #198
 Regression analysis finds the best fitting line between two
variables. Pay experts call this line the






Market pay line.
Y = a + bX
Y= predicted pay
X= job evaluation points
a= the Y intercept
b= the slope
Policy and strategic change
 Companies can choose from 3 pay policies

 1.Market lead
 2.Market lag
 3.Market match

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