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a publication of Cascade Employers Association
 

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MAY 2012    

   Dollars & Sense Poll

  In This Issue:

 

 

 

 

Are You Paying Your People Too Little, Too Much, Or About Right?

By Jerry E. Bumgarner, CCP
Director, Research and Compensation Services
jbumgarner@cascadeemployers.com

If the market pay data you are using isn’t representative of area market practices, you could be paying your people too little or even too much. Either way, the affect might be an adverse impact on your bottom line. While many pay surveys look good at first glance, if you dig deeper into how they are compiled you may be alarmed at what you find.

To help you distinguish between the “good,” “bad” and downright “ugly” data sources, and strengthen your confidence in the surveys you use, I have summarized 7 Best Practice Tests in the table below. While you will find that many surveys pass these tests, there are also many that fail miserably.

7 Best Practice Tests

  1. Job descriptions, with specific job matching criteria, are used to support accurate data reporting
  2. Participants are contacted to “clean” the data and support accuracy and validity of results.
  3. The number of responses and incumbents are reported to help you assure a sufficient sample.
  4. Actual wages, salaries, and incentives paid are reported to provide a complete pay picture.
  5. Industry, size, geographic, and other data cuts are included to support in-depth data analysis.
  6. Confidentiality of participant data is assured by reporting aggregate/summary data only.
  7. Data is collected by a third party directly from a representative group of employers

I encourage caution whenever you use any market pay data source. At the same time, be especially wary of those that fail to meet one or more of the above 7 tests. As a career compensation professional and frequent user of market pay surveys, it is my opinion that several of the online data sources (I won’t name them here), fail to meet some of the above tests. While you may need to use data from such sources as a last resort, do so with caution.

Other Things to Consider

  1. If data is aged, it is aged based on area pay trends and not cost of living for the area.
  2. The size of employers responding is representative of the area covered by the survey.
  3. All pertinent pay data elements are reported (wages/salaries, ranges, incentives/bonuses).
  4. Data is collected for the full range of jobs in a “family” (e.g., Accountant I, II, III).
  5. Includes measures of central tendency and extremes (e.g., averages, medians, percentiles).

Surveys conducted by SalaryTrends® (Cascade Employers Association), Milliman, CompBase USA, Mercer, Towers Watson and other “professional” groups generally meet most of these quality tests (including all 7 Best Practice Tests). But, keep in mind that the validity of the data for individual jobs in any survey may still be suspect if the sample size is too small (e.g., less than 5 organizations responding).

For example, whereas SalaryTrends and Milliman surveys tend to have strong samples for most survey jobs in the Oregon and Southwestern Washington area, those conducted by CompBase USA, Mercer, Towers Watson, and other large national survey organizations generally have weak responses in our geographic area … but stronger response levels for the Northwest as a whole and for the entire nation combined.

WORD OF CAUTION: Due to clear geographic pay differences (e.g., Portland versus Seattle), care must be exercised whenever using national pay data to project local area pay practices.

SalaryTrends® Oregon Pay Survey

With a 43% participation rate, the Oregon Regional Pay Survey has the strongest response rate among Oregon surveys, and the highest rate among employer association across the U.S. which average 32%”.

“Our high participation rate can be attributed in part to our online Evergreen Survey platform which allows employers to provide input, update their data, and get access to fresh area pay data at any time during the year.”
– Tina Hamel, SalaryTrends® Survey Manager

Regardless of the survey sources you use, I encourage you to consider the above tests whenever using survey data to determine the right pay practices for your organization. Avoid the potential adverse financial affects of paying your employee too little, too much, or inequitably.

TOP

FreshView on Compliance:
Can I pay someone at a reduced-rate during their probationary period?

By Patrice Altenhofen, President
paltenhofen@cascadeemployers.com

The short answer is yes. You may set a starting wage at one rate, and then raise the wage rate once the employee becomes established and is meeting more demanding performance requirements.

The long answer is reconsider using the term “probationary.” This term is often thought of as disciplinary and can set a negative tone at the outset of employment. Consider using the term “introductory” if the period is viewed as a training period during which new employees are expected to reach at least a minimum level of competency for continuing employment in a “regular” employee status. A formal evaluation should conclude any period of introduction.

Moreover, “at-will employers” must use caution addressing discipline in probationary/introductory period policies. Avoid language suggesting that introductory employees may be terminated for any reason. This is essentially the definition of “at-will employment.” If introductory employees may be discharged at will, the implication is that something more – “just cause,” for example – is necessary to discharge employees once they have successfully completed the introductory period.

In fact, a probationary or introductory period has no impact on an employer’s disciplinary flexibility. This is a common misconception of employers, and particularly of supervisors.

For more information, login to see Cascade's sample Introductory Period policy.

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Survey Spotlight

By Tina Hamel, Survey Manager
thamel@cascadeemployers.com

SalaryTrends® surveys from Cascade Employers Association cover the pay practices of diverse organizations from various markets (Oregon, SW Washington, Northwest Regional, and National), and include multiple relevant data summaries. These valuable tools enable users to evaluate their competitiveness within specific talent markets.

Now Open for participation:

Contact us with questions at surveys@salarytrends.com.

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Did You Know?

On Monday, May 14th, Cascade sent out a survey to all of our contacts asking the simple question of, “What is on your desk today?” We received an overwhelming response to this survey and 26% of those of you who responded said that you were making decisions concerning salaries that day.

Did you know that you can ask Cascade can help you with the following salary information?

  • Login to your Salarytrends® account and find out what current market rates for salaries are.
  • Research and compile current salary information.
  • Research and compile current salary information for a job description you don’t know how to price.
  • Set up a salary program that gives an unbiased, third-party viewpoint tailored to your company.
  • Help you find a class or webinar that gives you training on what a salary program is and what it can offer to your organization.
  • Send you a free webinar that tells what the current outlook is for Oregon salaries and wages.

And, as always, if you have any further questions or you just need to talk to someone who “gets it”; don’t hesitate to give us a call.

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An Invitation To Participate

You are invited to participate in the 2012 IT & Engineering Salary Survey. With technical talent experiencing growing market demand, you won't want to miss out on the fresh, local, regional, and national pay survey report.

Participating members receive the report for free (another great benefit of Cascade membership). Participating non-members will save nearly 60% off the standard price of $790; with participation the report is only $325!

Request a participant packet today by sending Tina an e-mail.

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