What is a Salary Survey?

The salary survey is the vehicle for relating the organisation’s salaries to those for similar jobs in other organisations. Salary survey information provides the raw material for translating job sizes into currencies, that is, for job pricing. The survey gives information on base salaries and benefits. This can be used by the human resource manager to calculate the organisation’s competitive position and to plan any corrective actions required. As a first step in this process the human resource manager must identify the organisations for labor. In other words, does the organisation want to compare itself with:

  • organisations in the same or related industries
  • organisations in the same geographical area
  • progressive Australian organisations
  • multinationals
  • organisations of a similar size in terms of sales, number of employees and so on
  • the general community
  • private sector companies only
  • mix of private and public sector organisations?

By answering such questions, the human resource manager can determine the type of salary survey required to meet the organisation’s objectives.

For a survey to be of value, it is essential for an organisation to ask the following questions:

  • Who are the participants? Are they quality organisations, or unsophisticated or unknown organisations?
  • Who has access to the published information? Some organisations may be reluctant to disclose information if the survey is commercially available and not restricted to participants only.
  • How was job matching completed? By personal interview? By comparing job titles? By looking at salary levels? By matching job descriptions?
  • Who did the matching? An experienced salary administrator or a junior clerk? If the survey is to have value, it is critical that ‘apples be compared with apples’. The saying ‘garbage in, garbage out’ is especially true in salary surveying.
  • Who is conducting the survey? Are they ethical? Are they experts?
  • How is the survey information to be presented? Is it in a format which is meaningful, easy to understand and statistically correct?
  • Is professional assistance available to help with interpretation if required?
  • Does the survey cover an appropriate range of relevant jobs for the organisation’s requirements? Are there sufficient good job matches to make participation worth the effort?
  • How old is the information? When was the survey conducted?

It must be stressed that to get valid data from a survey requires a lot of preparation and hard work. There is a direct relationship between quality of results and the effort made by the participants to ensure that jobs are matched correctly for job content, and that salary information is reported accurately. Although basic, the most widely acknowledged shortcoming of salary surveys is the problem of job compatibility.

Exchange of salary survey information between human resource managers is facilitated if organisations use the same job evaluation technique. Most salary administrators are prepared to exchange information and spend time to ensure that guesswork is eliminated from job matching.

Job evaluation determines the relative worth of each job to the organisation. (i.e., job evaluation is concerned with internal equity). The salary survey makes it possible to assign appropriate salary ranges to each job (i.e., the salary survey helps to ensure that external equity is achieved and maintained).

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