C17 Market Pricing - Conducting a Competitive Pay Analysis Questions and Answers

To determine which jobs should be grouped together and form the foundation of the base pay system

To assign grades to non-benchmarked jobs

To determine internal and external equity

To adjust pay rates based on cost-of-living adjustments

When market data are not available for a specific job

When an organization is undergoing a restructuring process

When an employee is promoted to a higher position

When an organization is experiencing financial difficulties

To adjust the data for inflation

To adjust the data for changes in the job market

To adjust the data for changes in the industry

To adjust the data for changes in the survey methodology

Jobs that have the same job title

Jobs with the same job description

Jobs which appear to be of similar overall job worth

Jobs with similar educational requirements

Correlation analysis

Multiple linear regression

Simple linear regression

Analysis of variance

Easy to understand and explain, aligned with internal equity, accurate for all types of jobs, provides high degree of transparency

May be difficult to obtain data, may not be aligned with internal equity, not defensible on job content basis, may be overly time consuming

Simple to administer and update for currency, responsive to the market, not overly time consuming compared to other methods, high degree of transparency

Based on job content, provides flexibility for job evaluation, accurate for all types of jobs, requires less market data

By taking the average of reported salaries

By taking the median of reported salaries

By using a statistical formula to determine the range

By taking the highest and lowest reported salaries and creating a range

Education, experience, and age

Skill, effort, and working conditions

Job title, job location, and performance

Reporting relationship, organizational structure, and years of service

If your job matches 80% or higher, it's a "strong" match

If your job matches 70% or higher, it's a "strong" match

If your job matches 60% or higher, it's a "strong" match

Any market inequities are built in

Simple to administer

Takes into consideration the company's perceived value of a job

Legally defensible based on job content

To establish a hierarchy of job titles within an organization

To determine an employee's overall worth to the organization

To ensure external equity among positions and groups of positions

To determine internal equity among positions and groups of positions

Information about each job in an organization?

Information necessary to complete the job evaluation process.

Principles that guide the design, implementation and administration of a compensation program.

Statement of what the organization believes about how people should be rewarded.

May be difficult to obtain data, may not be aligned with internal equity, not defensible on job content basis, may be overly time consuming

Simple to administer and update for currency, responsive to the market, not overly time consuming compared to other methods, high degree of transparency

Does not consider market rates, limited in accuracy, subjective, not useful for large organizations

May not accurately reflect job value, subjective, may not be useful for small organizations

Offering higher compensation than competitors

Providing only monetary compensation

Determine the right mix of reward components that meet the goals of attracting the right talent while staying within the budget

Offering only non-monetary rewards

The extent to which the survey has been audited

The number of survey questions

The type of survey methodology used

The length of the survey

Customer information

Financial information

Information related to individual employees

Marketing materials

The combination of base pay and long-term incentives

The sum of total cash compensation and benefits

The amount of compensation that an employee receives in relation to their performance

The non-financial aspects of the employment experience

Mode

Range

Median

Mean

Standard deviation

Financial strategy

Marketing strategy

Production strategy

Human resources strategy

Information technology strategy

Published survey

Custom third-party survey

Conducting own survey

Online database

A ranking of jobs based on the number of years of experience required

A ranking of jobs based on the level of education required

A ranking of jobs based on their worth to the organization

The process of grouping or categorizing jobs relative to other jobs, based on factors such as skills, responsibilities, and pay level