Pay Survey Practices Part I Purpose of Pay

Pay Survey Practices - Part I • Purpose of Pay Survey – Price key or “benchmark” jobs in the market – Examine both base salary and benefits • Select Appropriate Market to Survey… – Local Market - min. wage, non-exempt jobs – Regional Market - professional, middle mgmt. Jobs – National/International Market - executive, scarce professional jobs • Basis for selecting markets and pay comparators – Who are competitors for employees? – Which firms hire our exiting employees? – Who are our competitors in the product markets? MGMT 4030 - Managing Employee Reward Systems

Pay Survey Practices - Part I (Cont’d) • Types of Pay Surveys 1. Private Survey - provided by consulting firm or trade association - most expensive, but has most useful information 2. Government Survey - Bureau of Labor Statistics (BLS) - low cost, but designed mainly for economic studies and research 3. Self designed Survey - company does an inhouse survey: Caution: the courts may view this approach as a form of price fixing with possible fines and penalties. MGMT 4030 - Managing Employee Reward Systems

Pay Surveys: Critical Thinking Questions 1. Compare the Undergraduate CU pay survey to the MBA CU pay survey. • Which is the highest paying UG major? MBA major? What accounts for the differences? • Why is the spread in pay ranges (upper to lower bounds) so much greater for the MBA students? 2. How could you use the pay survey for obtaining an attractive salary on your next job? 3. Refer to Working Woman’s 1996 survey. Why are there such large differences in pay for the same job at different companies? What is your explanation? MGMT 4030 - Managing Employee Reward Systems