Not participating in compensation studies can result in overpaid and underpaid staff—an unjust situation. The former is unfair to your company and the latter is unfair to your staff.
According to The Croner Company, participation in compensation surveys yields several benefits. Firstly, it gives the participating company a clear competitive advantage in that the current market data that the company gathers will ensure that it pays out no more or no less than is needed to remain competitive.
Secondly, compensation decisions will be justified when taken based on industry-specific compensation data. These data can be applied to “base salaries, bonuses, equity, sales incentive plans, management incentive plans and perquisites.” Without valid information, your company is not fully informed and you make decisions in a fragmented way.
Compensation surveys on all jobs in your industry’s major functions also provide you with data that allow you to maintain consistent and defensible pay levels. These data can allow you to make your case with top management in an objective manner.
When you participate in compensation studies, you keep up with the latest trends by position. Trends by position is important as not all positions or employment levels have compensation changes simultaneously, or of the same magnitude. Also, jobs are constantly evolving with new trends.
Participating in compensation studies can raise concerns for the confidentiality of your company’s shared information. It is therefore important to note that compensation surveys have been done for years by consulting firms that are highly regarded by the participants that support them. These consulting firms ensure the confidentiality of the data they handle and provide. It is critical to these consulting firms to guard the confidentiality of the information you provide. Your country’s laws may also provide for the protection of your shared information.
Would you like to develop your expertise in conducting and applying compensation studies? eCornell can help you with that. Just check in to their executive certificate course in Compensation Studies here and check out with an Ivy League Certificate that will set you apart as an expert in this area.