In a BLR webinar entitled "Compensation Strategies: How to Build a Market-Competitive Salary Structure that Retains and Attracts the Very Best," Diana D. Neelman, CCP of Compensation Resources, Inc. addressed the issue of determining salary market value.
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Get Your Report Now!Once survey data has been collected and aged to a present date, you can calculate the mean, median, trim mean and market composite.
- Mean is the simple average.
- Median is the middle number.
- Trim mean is the average that eliminates the high and low data elements.
- Market composite (MC) is the average of the Mean, Median and Trim Mean and represents the best estimate of the market value for the position.
Regression may also be utilized. Be sure to look critically at all inputs. Are the market data inputs reasonably close? Where wide differences exist, reexamine job matching. Also examine the relationship of market data to your company's perceived job worth and hierarchy. Does the market data reflect how you value the position?
When interpreting market data, be sure salary ranges are adjusted to reflect changes in the labor market. Determine the difference in pay between market data and current salaries for incumbents, including all elements of pay. Then determine the overall difference with the market.
Diana D. Neelman is a Principal and Senior Consultant with Compensation Resources, Inc.. (www. compensationresources.com) She manages the research and data analysis relative to the design and implementation of comprehensive compensation programs. Ms. Neelman is responsible for the development of written policy and communication materials, including plan documents, policies and procedures manuals and administrative forms that support the plan designs. She is also responsible for developing and conducting training programs covering various compensation topics. Furthermore, she oversees CRI's Survey Department, which published various compensation and benefits studies each year.
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