Why Use A Compensation Survey? - The Croner Company

Posted on Nov 3, 2020 by in Attracting and Retaining Talent, Compensation Programs, Compensation Solutions, Compensation Surveys

It’s tempting to determine salary, bonus and stock levels of your executives and employees based upon anecdotal pay amounts or on readily available self-reported salary data.  However, doing so is akin to guessing at sales levels with your largest customers, or to pricing your leading product based on a conversation with a former employee. 

Instead, we suggest you approach salary structure you would make a major investment decision — by evaluating as much market information as is available.

All companies strive to use competitive data in all areas of operations. Information that lacks validity or is anecdotal is not useful.  If you are not availing yourself of the most current, valid competitive market information on all facets of your company’s pay, you are likely paying your employees too much, or not enough to attract the caliber of talent you need.

Focused, industry-specific market information creates a competitive advantage and provides your organization with guidance to make informed decisions. Industry specific compensation surveys provide competitive data on prevailing pay levels for your jobs. These surveys can play a key element in human resources decisions at all levels of your company.

  • Compensation costs likely are the largest expense for your organization. Strong competitive data assists management in making rational decisions that preclude paying too much or too little.
  • Detailed knowledge of the market level of pay for industry specific positions enables competitive, consistent and defensible pay levels to be set across the company.
  • Regular participation in industry-specific surveys provides trend information by position. Data movements are not symmetrical so not all disciplines and levels experience compensation changes of the same magnitude.
  • Data on prevailing pay and reward practices enable you to design and administer competitive, cost-effective incentive and stock plans. Effective pay plans help your company ensure the recruitment, motivation and retention of staff.

So, why use non-validated and anecdotal information to set pay or to design your pay practices? Find compensation surveys relevant to your industry, and participate in those surveys. It’s a cost-effective way to make better compensation decisions.  After all, survey participation leads to results.

 For full article, click here: Why Participate in Compensation Surveys