WASHINGTON--(BUSINESS WIRE)--Majority of global organizations use today's competing labor markets and the need to recruit top talent in determining how much money to pay their workforces, according to a new survey, "Job Evaluation and Market Pricing Practices" conducted by WorldatWork and underwritten by Empsight.
WorldatWork, a nonprofit HR association and leading compensation authority, and Empsight, a compensation consulting firm, released the findings revealing that 70% of organizations have a written compensation philosophy and 33% specify the method of job evaluation within their philosophy. (See Figure 6.)
According to the report, 88% of organizations have an established method for evaluating jobs and market pricing continues to outpace all other methods as the dominant form of job evaluation, ranging between 68% and 74%. (See Figure 9 and 10.)
Additionally, 42% to 48% of organizations use three or more survey sources to price their jobs. National data often is used to evaluate senior management roles. Local, industry-specific data is most commonly used to price production-level positions.
“The fact that market pricing is now the dominant method of job evaluation is clear evidence that employees are much more knowledgeable about competitive pay levels and are likely to change employers more often than their parents were,” said Kerry Chou, senior practice leader at WorldatWork. “Employee compensation is a constantly moving target and it is necessary for compensation specialists to know the salary and benefits trends driving today’s workforce.”
Additional highlights from the survey:
- About half of organizations (46% to 51%) characterized their job evaluation system as “very effective,” with a similar percentage of organizations deeming their systems as “somewhat effective.” (See Figure 13.)
- 87% to 89% of job evaluation is prompted by a newly created job, followed closely by significant changes in the job (81% to 86%). (See Figure 12.)
- The majority of organizations (93%) use a numeric or alphanumeric job code within their HR/payroll system. (See Figure 14.) Of those, more than half (55%) use a “smart” code in which certain digits or characters have specific meaning.
- More than one-third of organizations match at least 80% of their jobs to survey sources and nearly 70% of organizations matching at least 60% of their jobs. (See Figure 17.)
“The new research supports our experience that companies market price the majority of their professional and executive positions to national surveys,” said Jeremy Feinstein, managing director of Empsight. “We know that large, more complex organizations tend to benchmark their specialized jobs to highly relevant market data. As this study shows, companies competing in the 21st century workplace will need to dig deeper to evaluate long-standing, traditional jobs as well as new hot jobs such as big data/analytics, digital marketing and privacy.”
Methodology:
Survey invitations were sent electronically to 5,573 WorldatWork members on Aug. 19, 2015. The survey closed on Sept. 4, 2015, with 753 responses, a 14% response rate. The dataset was cleaned and analyzed using statistical software. WorldatWork conducted similar job evaluation and market pricing surveys in 2013 and 2009.
WorldatWork and Empsight compensation experts are available for comment. Interested media should contact Amy Repke at amy.repke@worldatwork.org or 202-315-5514.
About WorldatWork®
The Total Rewards Association
WorldatWork (www.worldatwork.org) is a nonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards — strategies to attract, motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide comprehensive education, certification, research, advocacy and community, enhancing careers of professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has more than 70,000 members and subscribers worldwide; 95 percent of Fortune 500 companies employ a WorldatWork member. Founded in 1955, WorldatWork is affiliated with more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington, D.C.
About Empsight
Empsight International, LLC compiles and publishes compensation surveys which provide users in Fortune 500 and large multi-national corporations with comprehensive analyses of selected functions or segments which are often under-served from a compensation data perspective. Founded in 2003, Empsight has earned a reputation for quality and innovation amongst its client base, as reflected in recurring participation in our surveys. Many clients participate in multiple surveys each year. Our principals and staff have significant experience in consulting on compensation, organizational and human resource issues across multiple industry sectors.
