Salary Survey Methods: Differences in Market Pay Curves over a Seven-Year Period

Abstract

Virtually all large organizations consider labour market information in their wage-level decisions. Decisions must be made on what jobs and organizations are to be surveyed, type and quantity of information to be collected, and methods of collecting, analysing and interpreting data. Considering all these variables, the organization is faced with the impracticality of adjusting its pay structure according to a market pay curve which inadequately reflects market ‘going rates’. This study indicates the extent to which a single pay structure received differing adjustments as a result of applying three different salary survey methods to the same labour market over a seven-year period. Results indicate differences in average salary range values obtained from the respective survey methods which varied from 0,4% to 10,8%. Differences in ranges at the lower levels of the job hierarchy varied from 2,3% to 10,8%; and at the upper-levels from 1,1% to 13,2%. These discrepancies suggest problems in terms of cost to the organization, in that ultimately surveys chase surveys, and in terms of effects on the inflation rate.