Paying employees fairly is ethical and good business. Underpay, and your employees may fly the coup to look for better compensation. Overpay, and your company's profitability will take a hit. That's why many companies utilize market compensation data in the form of a salary survey to get an accurate evaluation of the value of their jobs in the marketplace.
However, salary information is often held close to the vest. To combat that, today many companies, employee management consulting agencies, universities, and research groups conduct salary analysis through online survey software.
According to a poll from Salary.com, over 80 percent of HR professionals and managers of businesses say that their organizations either purchase or participate in a salary survey at least once per year. The results of such a survey tool help both employees and employers make the right decision when it comes to compensation and benefits.
It's essential that organizations bridge the gap between their own compensation packages and that of the industry standard. It's particularly important that this gap is bridged locally. A salary survey provides important data on industry standards, enabling organizations to implement benchmarks and compensation strategies, including the optimal, median, starting, and mid-point salaries.
Information obtained from salary surveys help HR managers design, manage, and implement their organization's compensation structure to ensure it is not only on par with industry benchmarks, but there is internal consistency. Internal pay equity involves a comparison of an employees’ pay with those in similar positions within an organization. On the other hand, employees’ pay compared with those with similar positions outside the doors of the company is the basis of external pay equity. Organizations should strive to maintain a equilibrium between both external and internal pay equity.
While salary and wage surveys serve as a useful survey tool of collecting compensation data, they are more valuable when they take into account a multitude of factors. For instance, a employees salary depends not only on the type of position he holds, but his years of experience, education level, and location. For example, the average customer service representative in New York pulls in $17.44 per hour as of May 2011, while customer service representatives in Florida make an average of $14.25 per hour, according to the Bureau of Labor Statistics.
Today's marketplace is extremely competitive in many industries. Not only does an organization need to provide a top of the line product and world-class service, but it needs to have highly talented and skilled individuals to build a successful business and keep it operating profitably. Because the cream of the crop are highly sought after, a fair compensation system is one of the most effective ways to attract and retain top talent. It's also a way to motivate employees to perform at their best, which helps a business thrive.
Therefore, it's essential to consider all of these factors when conducting a salary survey, and utilizing survey software is a great instrument for accomplishing just that.