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. explained the goals and uses of market pricing.
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Get Your Report Now!The goals of market pricing should be to:
- Determine competitive value of positions.
- Determine the company's overall positioning in the marketplace.
- Confirm pay positioning against philosophy.
- Provide means by which to evaluate salary structure(s).
- Ensure pay programs achieve basic objectives of compensation.
The uses for market pricing include:
- Identify competitive market for pay elements -- fixed and variable.
- Determine market ratios of fixed and variable.
- Use ratios to design incentive plans consistent with compensation philosophy.
- Meet basic compensation objectives.
The first steps to doing this are to:
- Collect job information and job descriptions.
- Confirm the job descriptions are accurate.
- Use a questionnaire to update job information.
- Have jobs changed due to prior restructuring and/or downsizing?
- Confirm job information is current and accurate (job summaries or "thumbnails" can be used).
- Ensure an understanding of reporting relationships and hierarchy within the organization and examine the organizational charts.
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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