Is the right person preparing your compensation survey file ?

Welcome to the final instalment in this May series on compensation surveys. After arguing why you should participate in compensation surveys and sharing 4 habits to  simplify your preparation, and then 2 more tips to prepare the salary survey submission files, I gave some ideas of where you could look for information when benchmarking retail positions. Of course these tips could apply to any industry or any new country that you are entering.

Today I would like to make a point against the habit of many organisations.

Participating in compensation surveys takes a lot of time – that is, if you prepare the files properly.

You need to gather the salary information, usually from multiple files that don’t have exactly the same list of employees in them. The compiling is often done manually, or using vlook-up which is better as it reduces the risk of error – but only works if you have a common identifier between the files.

You need to also gather other types of information such as policies, and understand them enough to be able to present them accurately in the standardised manner required by the survey provider. This  often means breaking it down into “categories” such as executives, management, professionals, staff and blue collars – but these categories may not be the ones you used internally for identifying the different types of eligibility. One example coming from some companies in the financial services industry : for your Long-Term Incentive Plan or Deferred Incentive scheme, eligibility may not be based on the grade or function of the employee, but on the size of his or her actual bonus amount.

Then you need to ensure the compensation data is presented in the format required by the provider. For example birth dates may have to be changed from dd/mm/yyyy to yy. Or bonus information may be provided in the form of on-target, maximum and actual as well as annualised payment.

Finally comes the delicate exercise of the job matching. This requires a thorough understanding of the jobs in your organisation, as well as the descriptions provided as reference for the survey. The vocabulary used may be different. You may have to assess the “proportion” of difference between an internal position and one in the survey to decide whether you should match it or not (usually, you include in the survey submission when you have at least a 70 or 80% match between the two). Employees with the same title may be performing different activities in your organisation so the title is not always the only driver of knowing what people do in the company.

And in most surveys, you need to also create a correspondance between your internal grading structure, and the one used by the survey provider. This step is not always an obvious one, especially if your organisation does not use any of the “big” grading methodologies.

As you can see, preparing the file  for the submission to the survey requires technical/Excel and mathematical skills, interpretative skills for policies and job content matching, a thorough understanding of the jobs that exist in the company, and  the mastery of your grading methodology as well as that of the survey provider. That’s not mentioning the influencing skills required when some executives or senior managers want to get involved in the matching and sometimes dispaly a tendency to over-estimate the real level of responsibilities of the jobs in their part of the organisation.

Then, why is is it that in so many companies, participating to the compensation surveys is a task which is handed to some of the most junior HR or C&B employees, without any supervision from the Head of C&B or HR ? I know and understand  that after many years of experience in the field, having to be the one going through the exercise can feel a bit repetitive. But please, please, make sure that the person in charge of preparing the file is educated on it, understands the importanceof doing it properly, and is taught the basics of how to quickly check and find out if there are obvious discrepancies in the file.

Of course the providers run their own internal quality assurance checks – at least, the good providers do. And they will often identify some grey areas. But, they don’t know the jobs in your organisation, they don’t know what your employees really do, they can’t possibly know if you forgot an allowance or included an incorrect (yet realistic-looking) number.

So make sure your employees understand what the survey is for. Make sure you check the quality of the information and provide the employee with the background and support required to do a proper job.  Otherwise you expose your company to getting incorrect market information and therefore making high impact decisions based on data that is not truly reliable.

 

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Comments

  1. Hello Sandrine,

    It was a pleasure meeting you in Dubai during the conference, and truly enjoyed our conversation regarding the C&B stuff. I definitely would like to see you again in any future visit to Abu Dhabi.

    Take care,

    Ibrahim

    • Sandrine says

      Thanks Ibrahim, I’m glad you enjoyed the conference. I thought the speakers were knowledgeable, the audience very interactive, and the networking was great. Hopefully I’ll be a speaker at Human Assets next year ! In the mean time, please feel free to come back on Tuesday to read an overview of some of the salient facts shared at the conference.

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