The value of compensation surveys

By Sonia Chinnaiyah

Many companies are struggling to retain their valued employees and one of the paramount reasons could be due to poor rewarding strategies.

Most of the rewarding strategies adopted by such companies are either obsolete, ad-hoc, or based on biased factors, which neglects to recognise those who are truly committed and perform for the betterment of the organisation.

Consequently, it would be obvious that companies would bleed talent due to such anomalies in reward strategies that are not linked to performance and not in line with the market.

According to Frederick Herzberg's 'Two-Factor Theory' on motivation, salary is one of the hygiene factors (i.e. factors that cause dissatisfaction at work).

Herzberg argued that although such hygiene factors do not motivate staff, when they are inadequate it could cause serious dissatisfaction to employees. Moreover, salary is also identified as one of the factors that build a positive 'employer brand' to attract and retain good talent.

It is important for employers to realise that companies that are not up-to-date regarding the compensation strategy offered by the market will find it difficult to set the right tone to attract and retain talented staff.

It is similar to expecting a child to grow without meeting the basic necessities of life such as food, shelter and clothing, which would be a paradox. Thus, it makes good business sense for employers to be aware of the prevailing compensation strategy in the market.

Compensation surveys can be useful in tremendous ways to employers who are struggling in this scenario. Salary surveys will assist employers to be well updated regarding the prevailing market rate offered for similar jobs by their competitors.

This will empower employers to formulate their reward strategy on par with the market and also to be confident while negotiating payments with their employees especially, their prospective employees.

However, care should be taken when choosing the right salary survey. The 'internet era' has made it easy where we can get the details at the click of a button by simply 'Googling' the required details.

Although there are many published salary surveys floating in the market, one should be careful regarding the authenticity and credibility of the report. Any 'Tom-Dick and Harry' can produce a comprehensive salary survey that may be outdated or based on unreliable sources.

Yet, such surveys could grab the attention of the readers as it could be presented in a manner that will not let the readers be aware of such misleading information in the report (e.g. use of colourful graphs and statistics). Thus, organisations should be strategic when choosing the right salary surveys from various sources.

It is advisable to check the background of the key players who conduct the survey and their level of understanding on Human Resources Management (HRM) to compare 'apples-to-apples'.

According to salary.com poll, more than 80 percent of business managers and HR professionals said that their companies either participate or purchase at least one salary survey each year. Companies are willing to pay more for reliable third parties who have the capability of producing authentic surveys, which such companies would find it hard to source on their own.