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Published byGeorgiana Perkins Modified over 9 years ago
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Collecting Market Data Presented to NPELRA April 15, 2002 Bruce G. Lawson, CCP Fox Lawson & Associates LLC (602) 840-1070
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6 Steps Define Compensation Philosophy and Market Pricing Strategies Select and Review Survey Sources Match Jobs to Survey Sources Interpret Published Data Determine Market Rates Make Policy and Program Decisions
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Compensation Philosophy Base Compensation or Total Compensation? How do you define your competition? Industry type, size, location What is your target market position? Average, 50th percentile, 75th percentile How will the pay structure be tied to the market? Structure policy What is the targeted comparison of actual pay versus market pay? Actual pay versus midpoint pay relative to the market
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Selecting Survey Sources Published data versus custom survey Is the survey sponsor reputable? Are the survey job descriptions adequate for good matching? How large is the survey sample? How current is the data? Is the survey cost effective?
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Job Matching Benchmark jobs should exist in similar form in the marketplace Match should be based on description - not title Make sure numbers used are consistent (mean, median, etc.) Focus on essential duties and qualifications Determine if all data sources are equal
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Interpreting Data Be consistent in using statistics (mean, percentile, etc.) Trend analysis and regression analysis Weighted or un-weighted data Internal equity versus market parity Correlation co-efficient (R square)
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Determining Market Rates Trend or age all survey data to a common date Apply adjustments to jobs based on Philosophy/strategies Across the board, job by jobOccupational groupLevel of job Lead, Lead-Lag, or Lag
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Policy Decisions How competitive is your current system or plan? How are you using your compensation dollars? What do you want you pay plan to do for you? What can you afford to do? What is the business climate in which you must operate?
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Key Steps Gather and analyze pay data and practices at the total compensation level if possible Integrate market data with a job evaluation plan to design pay structures that blend market parity and internal equity Perform more advanced statistical analyses to develop pay structures with increasing, rather than constant, midpoint differentials Perform detailed cost analyses in relation to issues such as the implementation of new pay structures or the development of merit increase matrices and salary increase budgets
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