When you are market pricing jobs and find yourself in the enviable position of having multiple surveys and/or multiple survey cuts to select from, the question becomes what data do you use? Do you focus on the local geographic area where the job is located? The industry? Organizations similar in size? Some combination of the above? The right path may not be clear, particularly when you are new to market pricing and/or compensation.
I'd like to suggest a rule of thumb to guide you in your selection: Follow the labor market.
The labor market is your particular market for talent. It represents where you draw your talent from and where you potentially lose it to. And, most importantly, it is the external "stake in the ground" against which you set and assess your pay practices. Which makes its definition a key philosophical question underlying the design of your compensation program.
For most organizations, the labor market is not a singular one-size-fits-all-jobs phenomenon. The typical organization draws from different labor markets for different job groups. Executives might come strictly from within your industry, from organizations comparable in size/scope, but from anywhere in the nation. The labor market for specialized jobs like sales engineers, alternatively, might be any size/scope organization within your industry, but strictly the local or regional geographic area. Administrative support staff, on the other hand, might be drawn from the local geographic areas, from any industry or organization size.
If these represent the labor markets for your different job groups, then your selection of survey data should mirror this to the extent possible.
I sometimes find it helpful to chart out an organization's labor markets in a matrix, like the one shown below, to guide survey selection and market pricing efforts.
Clearly defining your organization's labor markets can provide helpful guidance through the all the choices involved in the market pricing process.
Creative Commons Photo "Arrow" by Paul Downey
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