Market Pricing - Module 4

To select the right sources for a survey, several factors should be considered. These factors include the survey participants and the number of incumbents reported, the age of the survey, the typical sample size, and the desired analysis and data sorts. Therefore, the statement "When selecting which survey(s) to use, one of the factors is selecting the right sources" is true.

The statement is true because the median salary is the middle value in a set of ranked salaries. It is calculated by arranging all the salaries in ascending or descending order and finding the middle value. The median is useful in determining the typical salary in a dataset, as it is not affected by extreme values or outliers. Therefore, it provides a more accurate representation of the central tendency of the salaries compared to the mean.

You should also use other sources like government labor statistics, reporting of executive compensation (e.g. public companies in their regulatory filings), proxies, association resources, and many other factors (i.e. your org's total rewards program)

The weighted-median salary is a measure that takes into account both the salary level and the number of individuals at each salary level. It provides an average salary that reflects the distribution of salaries within a particular job. Therefore, it accurately answers the question of what incumbents in a particular job are paid on average.

The unweighted-mean salary calculates the average salary for a particular job by taking the sum of all salaries and dividing it by the total number of salaries, regardless of any other factors such as company size or industry. It provides a general overview of what companies are paying for that job, without considering any specific variables. Therefore, the statement "On average, what are companies paying a particular job?" is true.

Salary information is considered to reflect the marketplace within plus or minus 10% because it allows for variations in compensation based on factors such as experience, education, location, and industry standards. This range ensures that salaries are competitive and aligned with market trends, allowing employers to attract and retain qualified talent. It also provides flexibility for negotiations and adjustments based on individual circumstances. Overall, this general rule helps maintain fairness and transparency in salary discussions and ensures that compensation remains in line with the market.

It's the first step in the market pricing model.

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When selecting which survey(s) to use, it is important to consider the support of management. This is because without their support, it may be difficult to gather the necessary resources and cooperation from employees to successfully conduct the survey. Additionally, it is crucial to know why you are seeking survey information, as having a clear rationale will help guide the survey design and ensure that the collected data is relevant and useful.

The correct answer suggests that in order to measure the market for high demand jobs or hot skill jobs, one should shift focus from the broadly defined job role to the individual employees with specific job-related skills. This means that instead of looking at job titles or descriptions, it is important to identify the specific skills that are in demand. Additionally, creating new skill and skill level definitions can help in accurately assessing the market. Furthermore, defining base skills and capturing compensation data on them can serve as a reference point for determining the premium for hot skills.

Skill-based pay for high demand jobs or hot skill jobs is driven by supply and demand, just like the overall market. This means that when there is a high demand for certain skills, the pay for individuals with those skills increases. Additionally, skill-based pay for these types of jobs fluctuates more dramatically from quarter to quarter in response to market conditions. This is because the demand for specific skills can change rapidly, leading to changes in compensation. Therefore, skill-based pay is closely tied to market trends and can vary significantly based on the current supply and demand dynamics.

To measure the market for high demand jobs or hot skill jobs, capturing a richer array of survey data by blending can be effective. This means combining different types of surveys or data collection methods to gather a more comprehensive understanding of the market. Additionally, conducting the survey more frequently can provide more up-to-date and accurate information about the demand for these jobs.