ECON 448 Pay Levels, Mix, and Pay Structures Surveys

Total compensation data includes...(3)

-Base pay -Total cash -Total compensation

What is the purpose of a survey? (5)

-Adjust pay level → how much to pay? -Adjust pay mix → what forms? -Adjust pay structure -Study special situations -Estimate competitors' labor costs

What approaches can one use to know what jobs one should include in their survey? (1)

-Benchmark Job approach -Low-high Approach (Wages of lowest- and highest- paid benchmark jobs used as anchors for skill-based structures) -Benchmark conversion (Difference are quantified when job content does not sufficiently match survey jobs: using the difference between job evaluation points for internal jobs and survey jobs)

What is a publicly available data? (1) What can and can't you see? (3) Is the data specific enough? (1)

-Bureau of Labor Statistics (BLS) -Cash -Bonus -Benefits -No stock ownership -Not often

What questions should you ask yourself to look for anomalies? (3)

-Does any one company dominate? -Do all employers show similar patterns? -Outliers?

What is ECI by BLS? (1) What does it measure? (1)

-Employment Cost Index -quarterly changes in employer costs for compensation

Organizations data includes...(2)

-Financial data and reporting relationships -Turnover and revenues

What can be used if the match is not perfect? (1)

-The benchmark conversion/survey leveling approach

Relevant labor markets include employers who compete in one or more areas within... (3)

-The same occupations or skills -the same geographic area -The same products and services

Who is responsible for the survey? (1) What are outside consulting firms used for? (1) What is an example? (1)

-compensation manager -to protect against possible "price-fixing" lawsuits -Sherman Act (Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.)

How can you conduct statistical analysis? (3) What do each represent?

-frequency distribution (unusual shapes may reflect problems) -central tendency (Reduces a large amount of data into a single number) -Variation (Quartiles and percentiles are a common measure used to set pay ranges or zones)

What does standard deviation tell us? (1) Small? (1) Large? (1)

-how similar or dissimilar the market rates are from each other -tightly bunched at the center -mean rates are more spread out

What does translating an external pay policy into practice require? (1) What does a survey provide? (1)

-info on the external market -the data for translating that policy into pay levels, pay mix, and structures

How many employers should be included? (1) What do National surveys often include? (1)

-no firm rules on how many to include - >100 employers

What is a survey? (1)

-systematic process of collecting and making judgments about the compensation paid by other employers

The pay data are usually updated (aging or trending) to forecast what? (1)

-the competitive rates for the future data when the pay decisions will be implemented

What does CPI measure? (1) What does it not change? (1)

-the rate of changes in prices for goods and services in the product market -wage changes in labor market

What four questions should you ask when designing a survey?

-who should be involved -how many employers -which jobs to include -what info should be collected

What are the 5 steps to interpreting survey results? (2)

1. verify data for accuracy and anomalies 2. statistical analysis 3. update survey data 4. construct a market pay line 5. combine internal structure and external market rates