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Cale Ottens of the Phoenix Business Journal breaks down the results of a joint study conducted by WorldatWork and Mercer.

“Fewer than half of the 560 companies surveyed said they use predictive modeling techniques to make compensation and salary decisions.

Most companies use benchmarking techniques. The survey revealed 95 percent of compensation professionals use benchmarking among peers within the company to make decisions, and 90 percent compare with external peers.

However, 67 percent of the companies reported they believe they have the skill levels to perform the more sophisticated analytical techniques, which require more research and data-collecting.”

This survey concerns WorldatWork. The firm feels that the best way to decide how much to pay individual employees is through projection methods, in which HR departments analyze specific data to generate predictions instead of making decisions based on what already has happened.

Predictive techniques require companies to look into each individual’s history, including education, training and development history. This is a time-consuming exercise and can be difficult for some organizations. Often times it can be beneficial and affordable for organizations to contract with an outside firm to conduct accurate salary surveys. These surveys allow for more competitive salaries and are a key part of excellent retention strategies. 

 

 

 

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