Answer to Question #316848 in Management for Che

Question

What is the role market data analysisin designing compensation schemes?

Answer 1

Managing market compensation means analyzing your organization's compensation strategy, by job and pay structure. You collect market compensation data from external survey sources, to compare the data against your organization's existing pay structures and compensation strategy.

Market-based pay structures determine salary ranges and pay grades based on a current market analysis of comparable positions and salaries. Salary ranges are designated for specific jobs as opposed to job type.

The process of defining market compensation rates involves:

• Matching your organization's jobs to similar benchmark jobs that appear in published compensation surveys.
• Developing market rates for the jobs.
• Comparing your organization's compensation rates to the market rates.
• Determining target market rates for your pay programs.