Market Pricing and Benchmarking

Market pricing has replaced other forms of job evaluation as the predominant method of determining appropriate salary rates within organizations. While market pricing fundamentally is a fairly simple process, it is time consuming. Also, it is sometimes more of an art than a science, requiring a combination of technical skill and judgment.

Effective market pricing depends on quality compensation survey data. Ideally, we recommend at least 3 sources for each job. However, even with several sources, no survey data is perfect, and anomalies often occur from year to year as well. In addition, there will always be jobs that the surveys you have don't cover, and there will also be job families with more (or less) levels in your company than particular surveys may measure.

At QualComp, we work with companies to determine the most appropriate surveys to use. Rather than maintaining our own survey library, however, and passing a marked-up cost along to you, we encourage you to own your own surveys. Thus, rather than incurring additional cost beyond the initial project when new or modified jobs come into play, you have the tools you need to price those jobs on your own.

Once the survey sources have been determined, we prepare a detailed spreadsheet for each job, aged to the implementation date of your choice. If a new salary structure also needs to be developed, we design that with you to best reflect the nature of your organization and then slot jobs accordingly. We take great care to review all jobs compared to others in the same job family and to those at similar levels throughout the organization. Ultimately you will have a salary structure that is both externally competitive and internally appropriate.

As a word of warning, be very wary of compensation surveys that won't list participants, or of on-line "compensation databases" and market pricing services that won't divulge the names of the particular surveys they use! Many of these services advertise "proprietary databases" that are little more than information gleaned from help wanted ads, BLS reports, and unfortunately, legitimate compensation surveys that have been unethically obtained.

Finally, the last part of any market pricing project that we do includes two important features: First, we provide you with a spreadsheet template so you can easily market price jobs on your own. Second, we train you on the process. We want you to be able to manage your compensation system on your own, rather than being tied to us. Does this potentially mean less revenue for us on an ongoing basis? Absolutely. That's the way it should be.