Now is the time of year that Compensation practitioners begin to receive their copies of just-published 2012 survey sources. For many, this will be the "starting gun" event for the annual compensation review of their reward programs - to answer the question, how competitive are we? How much are we going to need to spend next year?
Granted, the Finance folks have likely already locked in their plans for what the budgeted payroll spend will be for next year, but on or about Labor Day HR and Compensation will gear themselves up anyway in preparation to answer the question that the bean counters have already locked in an answer and ran with it. By November the Compensation people will have their own answer.
As we begin this market pricing process of matching titles and descriptions to the survey data it's worthwhile to mentally step back a moment and reflect that, whatever the surveys report as the "going rate," it's not like Moses coming down from the Mount with the tablets. There's not going to be a crack of thunder and a peal of lightening to accompany the revelations gleaned from the survey source. There will be no "Aha!" moment of, "so that's what we need to pay."
And anyway, it's not like you have to do what they tell you.
Feel the pulse
How often have you heard a manager say, "I can hire for less than you show the market rate." Clients tell me that all the time. I tell clients that all the time. Of course you can.
Surveys aren't meant to tell you what to pay, but only what others are paying. And that figure only represents what participating companies are reporting - which of course is not exactly what everyone is doing.
But how many managers understand or acknowledge that qualifier? How many read the small print behind the figures? And how many have their blinders on and simply see the figure on a spreadsheet or report and run off with the number? Think of Chicken Little being hit on the head, only instead of a portend of doom our little Compensation rascal is scrabbling about, telling anyone who would listen that they have the answer.
So have a care; don't think to use surveys as the "answer man," or having the "smoking gun" for your compensation issues. Survey data shouldn't replace either common sense or your professional judgment. Senior management is expecting you to understand and evaluate what you gain from your information sources. Only then, with a balanced perspective, should you recommend a particular course of action.
Anyone (almost) can read a survey. It's what you do next, how you interpret the data to form conclusions that lead to recommendations; that is what proves your worth as a Compensation practitioner.
The question mark left from reading compensation surveys is an especially sensitive issue for those working on the international stage. There the well-known limitations and even scarcity of robust data sources means that reported compensation figures are best used to provide only anecdotal information, with plenty of "yeah, buts" to qualify what's being reported.
However, management doesn't like to hear that. They want to pin their hat to the answer, just like they prefer to do in the U.S. It gives them a comfort, something to point at; something to blame if criticized. Only overseas there is even less ability to provide common usage trends and true "market" rates. There just aren't enough companies participating, not enough identified segments (industry, revenue, region, etc.) to have validated figures that you can point at, can try to match. Every reported figure should therefore have a list of qualifiers behind it. If only someone would be paying attention.
So use caution before explaining away your recommendations by saying, "but, the survey says . . . "
It's what you say that's important.
Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations. He is also associated with several HR Consulting firms as a contributing consultant. Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation. He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.