“I’m grossly underpaid as these surveys show,” says your employee as he or she comes down the hall armed with a pile of downloaded survey data. Consultant Barry L. Brown, SPHR, CCP, has a plan for blunting these attacks.
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Of course, it may be that your compensation program is flawed, but it’s more likely that the survey the employee is referencing is flawed or inappropriate, says Brown, of Effective Resources, Inc., who delivered his tips at a recent BLR-sponsored webinar.
It may be a bad survey that just wasn’t done well, or it may just not match the employee’s job or circumstances. Brown outlines the criteria that make a survey acceptable. We must know, he says:
- The source of the data,
- The number of participating companies,
- The number of incumbents for each data point,
- The effective date of the data, and
- The data demographics.
Brown suggests that you share your criteria with your employees and let them know that if the survey doesn’t meet these criteria, it can’t be considered.
Unless we know the critical components of the survey, we will not consider it reliable in determining “the market.”
Continue to invite survey sources, says Brown. You might find some new ones.
Always insist on quality data before using survey data as the basis of any compensation decision.
Brown’s hints on good survey work:
- Use more than one source to smooth out data bias. Not that data are bad, but participants often represent something that is not a perfect match—wrong size, national in nature, etc.
- Use industry-specific data for jobs that are truly industry-specific.
- Age data to a common point in time. Look at number of months between the survey and the use date. Look at the annual figure, e.g., 3 percent. The calculation is pretty simple on an Excel spreadsheet.
- Use a spreadsheet to capture your work and make future updates a breeze.
- Be sure to capture the survey job number, job title, and any demographics. You’ll often want to go back to the survey, and since you have already done the matching, that makes updating much easier.
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Geographic Differentials
When calculating geographic differentials, says Brown, consider the following:
- Use a reputable source for geographic differential data.
- Use salary differentials when building a pay structure for a given site or area.
- Use cost-of-living differentials ONLY when relocating someone.
- For large numbers of locations, group the differentials in workable groups.
- Update at least every 24 months.
In tomorrow’s Advisor, Brown on how to deal with salary compression, plus an introduction to the all-things-HR-in-one-place website, HR.BLR.com.