How Do Managers Make Educated Compensation Decisions?
By Darren Duquette



Photo coutesy of Flickr Creative Commons

Before I started working in the HR field, I always viewed compensation as a bit of a mysterious process. It was a pseudo-confidential, taboo topic that was discussed with a recruiter during the hiring phase and rarely broached for the remainder of a 30-year career.

Sure, there were rumors about what other people were paid, but nothing that could really be deciphered or viewed as a credible comparison without a family tree, strong understanding of hieroglyphics, a lunar calendar, and a currency inflation table: “Did you know that my brother’s college roommate has a friend with the same job as you? He worked for a different company, in a different industry and I overheard from his former neighbor that he made $90,000 before he retired 18 years ago.” I’m sure my HR department would have “taken action” had I provided them with this fact-laden notarized statement, just not likely the upward salary adjustment I was hoping for…

Now that I have experience in HR, primarily focusing on employee rewards and enabling technologies, I can honestly say that the process is much less mysterious than I had previously thought. Here is some of what I have learned over the past couple of years. For those of you who have already invested in advanced hieroglyphics degrees, my apologies for not having written this sooner.

I am happy to share that most salary decisions are fact-based and supported by data. A lot of data…most companies, actually, participate in and purchase compensation surveys which allow them to benchmark similar companies to determine competitive compensation levels for their employees. To efficiently process this amount of data they invest in compensation management technologies like Mercer’s Talent Impact | Reward portfolio.

Stay tuned next week as I delve further into how solutions like the Mercer’s Rewards Management portfolio help organizations ensure they are compensating employees fairly and competitively. Share your thoughts on salary and compensation in the comments below, and click here for more information on our Talent Impact solutions.