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How Compensation Surveys
are Used
Most employers that do utilize wage and salary
surveys on a regular basis have found them to be an invaluable planning tool.
Among other things, wage and salary surveys can be used to:
- Determine where your company's pay rates for certain jobs or groups
of jobs stand in relation to the labor market;
- Double-check the results of the company's evaluation program;
- Determine how competitive your company's starting salaries are in
relation to those elsewhere;
- Determine the need for (and the amount of) an across-the-board
increase; and
- Prepare for wage negotiations with union representatives.
But surveys should never be regarded as a
cure-all for the company's wage and salary problems. Many human and technical
factors come into play that can undermine the usefulness of survey data and the
conclusions or recommendations based on them. Incomplete data, for example, can
do more harm than good. A wage and salary analyst who is not really up to the
task may simply chart his company's pay rates against the rates obtained in a
survey, and submit this chart to management without analyzing the company's
position and recommending an appropriate course of action. Similarly, an analyst
who doesn't really understand the purpose of the survey may end up pursuing the
wrong objective.
Despite the evidence that wage and salary
surveys can and do serve a number of valuable purposes, they have fallen into
disfavor in a number of circles because of the ways in which they have been
abused or misused in the past. Most of these abuses can be traced to the
individual(s) who either conducted the survey or analyzed its findings. This is
why a thorough grounding in the basics of survey selection and survey analysis
is essential before the resulting data can be put to use.
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