Salary Benchmarking
Internal Comparison
Are the salaries paid to employees reasonable and fair?
A test for internal reasonableness is to examine the relationship of salaries points to job points established by Job Evaluation.
A straight line correlation indicates that as job size increase, there is a proportional increase in salary.
External Comparison
Given a standard measurement scale, compensation lines are directly comparable with one another. Consultants facilitate this process by publishing the industry and market practices of compensation. Thus in the same way that an organization can compare practices among departments within its own structure, it can compare with different industry segments outside the organization.
To compare the company’s salary practice lines with other companies, job evaluation Point Factor method is used as the common basis for job sizing, and the following chart can then be produced.
