This test is for module 5 of the Market Pricing exam for the Certified Compensation Professional Exam (CCP).
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Bringing taking data that was from multiple sources to one common point in time.
Increasing the market survey data by a percentage assumed t be representative of wage movement to bring data to a consistent point in time.
All of the above
None of the above.
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Aging factor - Sources i.e. survey providers, published budget project surveys, assumes actual pay increases by the budgeted amount)
Salary increase movements - Tends to be accurate, historical and not projected
Corporate culture - impacts what levels of compensation are expected by employees
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Aging over two calendar years - age one year first (and then age the second year compounding the increases), Do not combine into one factor
Compensation philosophy - lag, lead, lead-lag.
They type of survey used - the methodology used in the study will influence the aging process in a myriad of ways.
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Differential rates - Compensation levels increase at different rates for different groups (e.g. salaried employees tend to increase more than hourly)
Market research (i.e. job level[hourly, salary, executive], industry type, geographic locatioon, type of compensation [base pay, compensation])
Organizational structure - Can impact aging based on job structures and types
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Is the process of allocating additional emphasis (i.e. weight) to a particular job when blending survey data for two or more jobs.
When weighting survey data, the total percent of weighting cannot go above 100%.
When weighting survey data, the total percent of weighting can sometimes go above 100%.
Can place emphasis on time spent in (i.e. performing) a job
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Compensation strategy - industry related surveys would be more heavily weighted if you've defined your competitive labor
Quality of surveys
Quality of job match - some job matches will be more strong in certain surveys
Quality of talent pool in your geograpic region
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A representation of a part of reality (i.e. datasets)
Used to solve problems
Used to understand relationships between two or more sets of data
Is computationally complex and can only reliably be plotted by computers.
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As a Statistical technique - fits a straight line onto an x,y graph. Linear regression assumes that the basic relationship between the two variables is linear in nature.
Midpoints - Typically used to develop midpoints of a salary grade.
Valuable tool for determining market rate - helps determine the market rate for positions within a salary grade
Asymmetries - brings to light asymmetries in external market pay rates.
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Pay line of market rates - Develops a pay line of market rates
Pay line policy - because it is developed using your organization's compensation philosophy, this regression line can be referred to as you "pay policy line".
Pay structure midpoints - Using this style of analysis, pay structure midpoints will fall on the pay line.
Pay structure min / max - Using this structure, your minimum and maximum pay rates will fall along the pay line.
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Should know that an outlier is a data point in a data set that are anomalies when compared to the rest of the data.
Verify the data (including data in the survey sources)
It might be appropriate to consider eliminating the outliers from the data and running the analysis again.
Vary your approach when you collect the data
Should be aware that a single outlier, if extreme, can alter the line of best fit (i.e. the pay policy line).
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More clearly identify problems that perhaps can't be resolved within the context of the pay structure.
Alert you that unusual benchmark jobs may need to be handled by a special pay policy.
Eliminate outliers which might better align the midpoints to achieve competitive goals.
Vary your approach when you collect the data
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Each job's relative value to one another
Equal pay for jobs of equal worth (as perceived by the organization)
Equal worth is a perception issue - Employers and employees might have different perceptions of equal worth.
Can almost never be widely attained due to the differences in perceptions between employer and employee.
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Pay levels are compared to competitors
Prevailing external rates - fairness is defined by external market rates.
Equity is achieved when employees believe their compensation is equal to what they would receive if they worked at a similar job for another company in the same industry.
Tends to lead organizations to over pay their employees.
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Blend and balance - balancing internal vs. external equity
Job value - the organization needs to determine which jobs are of higher value to the organization.
Current pay structure - organizations shouldn't modify their current pay structures too radically or they might throw internal equity out of balance.
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