One of the hardest jobs in managing employees is making sure they’re happy. Although there are many aspects to creating happy employees, a fair and competitive wage is still the number one yardstick in measuring satisfaction.

Competitive reward is that remuneration level offered by an organization that compares favorably against other organizations in the same industry for similar jobs of competence.  To ensure that pay levels are competitive, it is necessary to track market rates for the jobs within the business, especially those jobs vulnerable to market pressure.

Companies strive to understand the market rates for certain cadres of jobs as this enables them to have effective negotiations with existing and potential employees.  Such information is vital in the attraction and retention of good candidates.

Market rates are likely to have an effect on the pay structures developed in an organization.  It is important therefore to know what the market offers before any decision on pay related issues is made.

To produce consistently high production levels a company needs to be competitive – information on competitor salary is derived from market surveys or purchasing data from outside consultants.

Types of Data gathered in a salary survey

Salary surveys are analyses of compensation data. This data may include quantifiable aspects of compensation such as: –

  • Base salaries
  • Increase percentages or amounts
  • Merit increases
  • Salary ranges
  • Starting salary
  • Incentives and bonuses
  • Allowances and benefits
  • Working hours

Salary surveys may also include non-quantifiable aspects of compensation such as:-

  • Educational requirements
  • Geographic location
  • Source of hire (internal/external)
  • Working conditions

Sources of information market rates

One of the principle means is through salary surveys. There are both Private (Also called special or customized surveys) and published surveys.

Private surveys are undertaken by individual companies for their own internal use. Published surveys are those made available to users in general and are undertaken by consulting firms.

Other sources include; club surveys and through advertisements.

No matter the type of survey, the purpose is to provide accurate and representative data on the current range of salaries and wage for the current salaries paid for jobs or levels of responsibility in question.

Published Surveys.

These collect general information about managerial salaries or cover the pay for specialist, professional, technical or office jobs.  General surveys are usually available across the counter.

When using a published survey, it is necessary to check on: –

  • Information provided
  • Size and composition of participants
  • Quality of job matching information
  • Degree to which the information is up to date
  • How well the data is presented.

Examples include the published salary surveys form (PWC) Price Waterhouse Coopers, The FKE and Government of Kenya Surveys.

Special surveys/Customized surveys/private surveys

These are usually conducted for an organization by management consultants.  This costs more but saves a lot of time and trouble.  Furthermore come companies may be willing to respond to an enquiry from a well-reputed consultant.

Surveys of this kind yield more precise and accurate and comparable data.  It may however be difficult to get a suitable number of participants to take part – due to fear and bureaucracy.

Pros and Cons

Customized surveys have several advantages:

  • They can be targeted directly at the companies with the closest match for your position.
  • You can collect current salary data, rather than data that was collected 12 months ago.
  • You can specify exactly the information you want to collect, rather than poring over general salary surveys.

They also have some distinct disadvantages:

  • They can be costly to administer in terms of time and money. However, those costs need to be compared to purchasing survey services, which can be expensive also.
  • They can come under more legal scrutiny with regard to pay discrimination (i.e., several companies collude on wage rates, or “price fixing”).

Club Surveys

These involve exchange of remuneration data between two or more companies who employ similar staff, rather than the product or services.  Clubs may be administered either by the individual companies or by management consultants.  Clubs tend to operate in single industries although some may cover a number of industries.  Many clubs do cover managerial and professional grades.

The information exchanged between companies is I n accordance with a standard format and on a regular basis.  The club surveys have all the advantages of special surveys and also saves a lot of time as well as providing regular information. Major advantage; participants in the survey know other participants are and that their data are accurate and relevant –misleading data give a company an edge over the competitor

Many organisations rely on the salary levels published in recruitment advertisements.  However, such information may be misleading as one may not get a good match and the quoted salary may not be the same as what is finally paid.  However such data can be used to supplement other more reliable sources.

Once you’ve determined the information you want to collect, organizing it in an orderly fashion is not too hard. Some of the most typical pay survey questions ask for the following information:

  • Minimum, midpoint, and maximums of a company’s pay range for the position.
  • Current rate of pay.
  • Number of people in the position (that will help you find the average).
  • Average length of service of a person in the position.

Availability and amount of bonus payments

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