Market Pricing & Salary Surveys Flashcards

The process of matching internal jobs to survey benchmark jobs based on duties and responsibilities is called:

Answer: Job matching

Job matching aligns internal positions to survey benchmark jobs by comparing scope, complexity, and accountabilities.

If a company's compa-ratio is greater than 1.0, it indicates that:

Answer: Average pay exceeds the midpoint of the pay range

A compa-ratio above 1.0 means average actual pay is above the midpoint, suggesting the workforce is paid above range center.

Which survey participant data characteristic should raise the most concern about survey data quality?

Answer: Very small number of incumbents reported per job

A very small incumbent count means the data is statistically unreliable and could be distorted by a single outlier.

A 'broadband' pay structure differs from a traditional grade structure primarily because it:

Answer: Has wider pay ranges with fewer grades

Broadbanding consolidates many traditional grades into a smaller number of wide salary bands.

When calculating a 'blended market rate' using multiple surveys, the analyst should weight surveys based on:

Answer: Relevance to the organization's labor market, sample size, and data quality

Weighting by relevance, sample size, and quality ensures the blended rate best reflects the organization's true competitive market.

The 'pay line' or 'market line' in salary survey analysis is derived by:

Answer: Plotting job evaluation points against market pay and fitting a regression line

A regression line through a scatter plot of job evaluation points vs. market rates creates the pay policy line.

Which of the following best describes the 'lead-lag' pay strategy?

Answer: Pay leads the market at the start of the year and lags by year-end on average

Under a lead-lag strategy, pay is set above market at the start of the year and falls to market level by year-end, averaging market pay.