Managing a Salary Survey Project Patricia A.

Transcript:Managing a Salary Survey Project Patricia A.:
Managing a Salary Survey Project Patricia A. Meglich, Ph.D., SPHR • 2011 Key concepts Session 1: Motivation theories. External equity. Determine the compensation philosophy. Purposes of a salary survey. Legal considerations. Make or buy decision. SHRM© 2011 2 Key concepts Session 2: Planning a salary survey project. Designing a survey. Collecting data. Session 3: Analyzing and interpreting survey results. Adjusting pay scales. SHRM© 2011 3 SHRM© 2011 Learning objectives for Session 1 External equity. Determine the compensation philosophy. Purposes of a salary survey. Legal considerations. Make-or-buy decision. 4 Motivation theories Maslow’s hierarchy of needs. Herzberg’s two-factor theory. Vroom’s expectancy theory. Adams’ equity theory. SHRM© 2011 5 Equity theory Inputs Outputs Inputs Outputs vs. Focal individual Referent others SHRM© 2011 6 Rebalancing the equity comparison Decrease your inputs: Stop working overtime. Take longer breaks. Don’t offer ideas or suggestions. Try to increase your outputs: Ask for a raise. Look for a new job with higher pay. SHRM© 2011 7 Equity considerations Internal equity: Job evaluation – relative worth of jobs within the organization. Parity between jobs. Parity between individuals in the same job. External equity: Market data – relative position in the marketplace. Attract and retain quality talent. Competitive position. SHRM© 2011 8 External equity Objectives: Attract talent. Retain talent. Reward desired performance. Cost-effective, affordable. Compensation philosophy: Competitive position. Compensation mix. SHRM© 2011 9 Compensation philosophy Competitive position: Lead: Consciously pay more than the competition. Lag: Pay less than the competition. Match: Pay roughly the same as competitors. Compensation mix (entitlement vs. performance): Fixed pay component. Variable pay components. Indirect rewards: Employee benefits. Intangible rewards. SHRM© 2011 10 Competitive position Lead the market: Pay in excess of the going rates. Provides the organization with ample supply of applicants, decreases turnover, prevents unionization attempts. May lead to higher overall labor costs. Lag the market: Pay below the going rates. May be due to financial inability to pay at market. May require increased non-financial rewards. Can lead to higher turnover, lower productivity, and lack of applicants. SHRM© 2011 11 Competitive position Match the market: Pay levels relative to the existing marketplace. Most commonly adopted strategy. Requires continuous monitoring and reactivity to changes in market (playing “catch-up”). Leads to acceptable talent acquisition and retention. Combination approach: Different strategies are used during different economic conditions. Different strategies used for different jobs within the organization. SHRM© 2011 12 Compensation mix Fixed pay: Base salary Variable pay