Salary Survey is step one in establishing pay rates while ensuring internal, external and sometimes procedural equity. Pay rates can only be set if you know what other employees are earning in the same industry for the same work done. So salary survey refers to carrying out surveys of determining what others are paying. It plays a big role in pricing jobs. It’s the duty of every employer to conduct such surveys- informal telephone, newspapers or internet salary survey.
Types of Salary Surveys:
• Formal: It collects compensation information from other employers, asking about number of employees, overtime policies, paid vacation and starting salaries.
• Informal: It is done over phone or internet. They are good for checking specific issues like how much incentive is being paid for a job, salary at which a new job must be advertised etc.
Uses of Salary Survey:
• Benchmark Jobs: These refer to the anchor jobs around which the employers slot other jobs, based on the jobs’ relative worth on the firm. Job evaluation helps in evaluating the net or relative worth of a job.
• Recruitment: Most of the employers price around 20% of their jobs in the market place offering a suitable pay, based on the informal and formal survey of what competitor firms are paying for similar jobs.
• Collect data: These surveys also helps the employer to collect other data like sick leave, insurance and vacations which provides a base for decisions regarding what benefits to pay to the employees.
Commercial, Professional and Government Salary Surveys
Many employers use the secondary data available with the professional associations, consulting firms or government agencies.
Private consulting and/or executive recruiting companies like Hay Associates, Heidrick and Struggles publish data covering compensation for top and middle management and members of board of directors.
Professional Organizations like the Society for Human Resource Management and the Financial Executives Institutes publish surveys of compensation practices among members of their associations.
Hence, this concludes the definition of Salary Survey along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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