Salary surveys are a key part of the Compensation function and billions of dollars of Human Capital decisions are made with them every year. The use of such market data is well-known by employees and managers, but how the data is used gets a bit less clear. This page provides an example 1-pager that can be shared to managers to better educate on how salary survey data is used to drive pay decisions within your Organization.
How Salary Surveys are Used at [YOUR COMPANY NAME]
Salary surveys are a key component of our Compensation strategy. We have developed a comprehensive approach to leveraging the most reliable market data to ensure that our jobs remain competitive within the local labor market. This document is intended to help you understand how salary surveys are used by your Compensation Team.
Our compensation philosophy is centered around offering competitive, fair, and equitable pay that rewards performance and is grounded in the following principles:
- Market Competitiveness: We strive to offer competitive pay by benchmarking our salary ranges against industry standards and adjusting them regularly to reflect market trends.
- Internal Equity: We ensure fair compensation within our organization by considering the skills, experience, and responsibilities of each employee
- Performance-Based Rewards: We believe in recognizing and rewarding exceptional performance, which is why a portion of your compensation may be tied to your individual performance and contributions to the organization.
How We Use Salary Surveys to Support Our Compensation Philosophy
Employer-reported salary surveys are the most trusted and reliable sources of compensation data available. [YOUR COMPANY NAME] uses the highest quality salary surveys from trusted vendors to ensure that our pay ranges are well-positioned and allow us to recruit and pay highly competitive compensation packages.
The salary surveys that we use include market data such as base pay, bonus pay, and long-term incentives in the locations where we hire and employ members of our team.
In addition to having locally relevant market data, we also ensure that the salary surveys we use are relevant to our industry and include representation of our competitors for talent.
By incorporating market data from various sources, we are confident that [INSERT COMPANY NAME] maintains a highly accurate and reliable understanding of the market trends in the industries and locations where we compete for talent.
We Use The Most Current Salary Survey Data Available
[YOUR COMPANY NAME] monitors the labor market movement and takes action to ensure that the market data that our compensation decisions are based on is current and up to date. The various salary surveys that we use are refreshed every 3 to 12 months. All market data is “aged” forward, meaning we apply a multiplier that factors in market movement and inflation to ensure that the salary survey data does not become outdated.
We Use Our Judgment to Ensure Competitive Pay
Compensation is a blend of art and science and the Compensation team’s job is to ensure [YOUR COMPANY NAME] remains competitive in the labor market. Although salary surveys (the science) provide valuable insights into market trends, the data is imperfect and only one part of the equation. We consider salary surveys to provide directional guidance for setting pay, but the compensation team also relies on other factors and judgment (the art) when evaluating compensation. Blending the market data with our expertise and judgment enables us to make data-driven decisions that support our company’s recruitment, retention, and engagement practices.