Market Pricing.ppt

Market Pricing Organizations seek to offer market based pay rates in order to attract and retain competent employees There are two basic methods to recognize market wage rates: Pure market pricing Guideline market pricing method Market Pricing Pure Market Pricing Pay Survey The organization develops brief narratives that describe job activities and incumbent requirements. The organization conducts pay rate survey of other organizations having employees who perform same work assignments in the same labor market. Each position assigned pay rate based on market This is the least costly method....It is easy to explain..…and judicially defensible. Market Pricing Market Pricing Guideline Method The Evergreen Approach This approach permits the influences of internal equity to interact with existing market rates when determining the rate of pay for jobs of an organization. Market PricingMarket Pricing Guide Line Method Steps STEP ONE: Establish a Guideline Scale (salary structure) with salary ranges that includes a series of salary grades and a minimum, mid-point, and maximum rate of pay for each using a 5% to 10% mid-point differential. Market Pricing STEP TWO: Develop realistic job descriptions that include job scope data Identify benchmark jobs (40 to 60 jobs) Example: WA State uses 84 jobs as market pricing benchmark positions in setting the classified pay structure Market Pricing STEP THREE: Use comprehensive market pricing surveys when matching benchmark jobs to other comparable employers jobs Define new pay rates and salary structure based market pricing Market Pricing Tools College and University Professional Association (CUPA) surveys. Milliman Management Professional Salary Survey Salary data-on-demand software products including CUPA Economic Research Institute WA Employment Service/BLS Salary surveys Why Five Salary Survey Tools The five salary surveys allow us to market price almost all of the exempt staff positions (146) a