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July 25, 2005
Expert Offers Tips for Mining Salary Surveys

Compensation is an art as much as it is a science and the salary survey is an important tool in navigating both worlds, according to Cheryl Aldrich, a senior compensation consultant in the St. Louis office of Palmer & Cay.

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Aldrich outlined her recommendations for selecting and using salary surveys during a recent audio conference by the Institute of Management & Administration.

Before an organization picks up a compensation survey, it should have a pay philosophy that defines how it will target pay (will it target the median?), according to Aldrich. In setting a survey strategy, an organization should decide how broadly it will define labor markets, how the data will be used, how frequently it will need market data (Aldrich says the maximum data should be aged is two years), and what resources (budgets, staff) are available for surveys and analyses.

Once the strategy is set, the organization can go about selecting surveys. For selection, the organization should consider the validity, coverage (number of participants and relevance), value (reporting options and flexibility), and administration (is it done by a third party) of the surveys, according to Aldrich.

Aldrich noted one of BLR's salary surveys as a good example of one containing the elements needed to mine appropriate data. She said signs of a good survey include job descriptions (which help with matching jobs) and the 25th, 50th, and 75th percentiles for salaries.

For executive pay benchmarking, a growing number of companies are looking at the proxies that public companies file for shareholders, Aldrich said. She said proxies and other public filings are a great way to see emerging trends, such as long-term incentives. In addition, companies can see the compensation strategies of their peers using proxies.

She said compensation professionals must understand the work in their organization in order to use salary surveys to their best advantage.

In addition, Aldrich recommended the use of three salary data sources if an organization is doing market pricing of jobs. Aldrich said that while surveys in which employees self-report pay should never be used to determine compensation, they can be used to look at trends.

BLR's 2005 Survey of Exempt Compensation and 2005 Survey of Nonexempt Compensation are available for purchase by calling 1-800-727-5257.

You can also find searchable data at's Salary Center.

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