how to build a competitive pay structure with compensation survey data
TRANSCRIPT
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TalentTakeawayswebinar & podcast series
How to Build aCompetitive Pay Structure withCompensation Survey Data
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AGENDAThe Series
TalentTakeawayswebinar & podcast series
Talent Takeaways Series | Compensation
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AGENDAThe Sponsor
Talent Takeaways Series | Compensation
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AGENDA
Brian SharpChief Marketing Officer
Mark AveryCEO
Our Presenters
Talent Takeaways Series | Compensation
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Overview
Most large organizations purchase and use a number of compensation surveys to keep their pay programs in line with the market
Salary range (structure) development is performed annually to ensure that a company’s pay range for a given job is market-competitive
Traditional methods
New technology-enabled capabilities
Talent Takeaways Series | Compensation
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Advantages of market based compensation
Easy to explain and understandPoint-factor and other job evaluation approaches confuse and frustrate line mgrs
Competitive necessityIn an increasingly global economy, there is much more pressure to manage and
control costsLabor is often viewed like any other resource – organizations want to pay the
“right” price for the level of quality they desire
Reduce administrative burdens
Puts the Comp/HR person on more solid ground in pay discussions
Talent Takeaways Series | Compensation
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Market data used for all types of structures
Establishingcompetitivepay ranges
Grade Structuremidpoints, salary ranges
Salary Bandcontrol points,
competitive pay zones
Job Family/Career Levelmidpoints, salary ranges
Discrete Market Pricingmidpoints, salary ranges
Job Evaluation Pointsmidpoints, point/pay values
Talent Takeaways Series | Compensation
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MarketPay Client “Flash Survey”
Talent Takeaways Series | Compensation
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Benchmarks are the starting point
A “market-priced” position whose pay levels are benchmarked, using compensation survey data, against “comparable” positions in relevant labor markets
Talent Takeaways Series | Compensation
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Ensuring salary ranges are competitive
Fairly common to average the market data at each level to set midpoints
Also typical to smooth the progression between midpoints
Talent Takeaways Series | Compensation
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Smooth the averages with regressionRegression line can be used to develop midpoints for each level
Talent Takeaways Series | Compensation
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Pay positioning vs. the market
“Competitive” = market median (most typical)
Most organizations target market medians to develop competitive programs
More aggressive organizations may target pay at above-average levels
Attempts to target 60th, 62½ or 65th percentiles are not uncommonProblematic to use statistical measures other than median or average to set policyLess common now due to economic conditions
Talent Takeaways Series | Compensation
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MarketPay clients target Market Medians
Talent Takeaways Series | Compensation
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Strategic positioning of pay
Is it appropriate to position pay for all jobs the same?
Or, should you pay more based on the strategic importance of jobs?
Set pay policy for your most important jobs above market
Pay others at or below market
Talent Takeaways Series | Compensation
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New approach enabled by technology
Not based on market-pricing of individual jobs
A typical client uses less than 1% of their survey data in benchmarksA fraction of the positionsA small fraction of the data cuts
Some organizations match survey jobs directly to their grades, and use technology to quickly and easily summarize entire surveys data
Talent Takeaways Series | Compensation
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Mapping survey jobs directly to your grades
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Talent Takeaways Series | Compensation
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Summarize your full survey library Pay levels can be averaged by (or regressed across) your grades
Talent Takeaways Series | Compensation
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“Global grading” facilitates int’l analysis
Consistent structures and leveling across countries
Surveys have moved towards country-to-country consistency
Makes it easier to match jobs and develop ranges in a uniform fashion
Talent Takeaways Series | Compensation
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Competitive pay ranges country by countryAfter matching standardized surveys to global grades, it’s quick and easy to develop market-based pay ranges in each country
Talent Takeaways Series | Compensation
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Regional pay structures within the US
Or region by region in the US to develop localized structures
Isolate the Northeast data cuts from your
surveys
Talent Takeaways Series | Compensation
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Summary
Market-based compensation programs are the predominant practice
Most common to use market-pricing benchmarks (individual jobs) as the basis for developing competitive salary range midpoints
Some organizations price their grades instead of jobs to facilitate the use surveys across countries and geographies
Technology is making all of this faster and easier, and bringing consultant-level tools to the compensation practitioner
Talent Takeaways Series | Compensation
![Page 22: How to Build A Competitive Pay Structure with Compensation Survey Data](https://reader035.vdocument.in/reader035/viewer/2022070602/587b84a11a28ab9d448b5d29/html5/thumbnails/22.jpg)
Summary
Market-based compensation programs are the predominant practice
Most common to use market-pricing benchmarks (individual jobs) as the basis for developing competitive salary range midpoints
Some organizations price their grades instead of jobs to facilitate the use surveys across countries and geographies
Technology is making all of this faster and easier, and bringing consultant-level tools to the compensation practitioner
Talent Takeaways Series | Compensation
![Page 23: How to Build A Competitive Pay Structure with Compensation Survey Data](https://reader035.vdocument.in/reader035/viewer/2022070602/587b84a11a28ab9d448b5d29/html5/thumbnails/23.jpg)
How to Build aCompetitive Pay Structure with
Compensation Survey Data
Thank you!
www.marketpay.com
Talent Takeaways Series | Compensation
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COMPview™Compensation Planning Software
Talent Takeaways Series | Compensation
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answer questions
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Talent Takeaways Series | Compensation
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TalentTakeawayswebinar & podcast series
How to Build aCompetitive Pay Structure withCompensation Survey Data