Section 2: External Competitiveness
Section 2 shifts your focus outside the company to compare pay rates of positions inside the firm with similar positions in the external market place. The shift to outside the company will move you away from the previous focus on e-sonic’s internal consistency to external competitiveness. Conducting an analysis of external market data will support your decisions about appropriate pay-policy mixes for job structures in the company.
In section 2 of Milestone Three, you will be introduced to tools compensation professionals use to allocate total compensation within job structures. Total compensation includes base pay, benefits, and varied incentives used to attract and retain employees. During the simulation you will use some of these tools to develop pay policies for each e-sonic job structure.
In order to conduct your external market survey you will use web-based salary sites developed by the US Bureau of Labor Statistics and Glassdoor.com. These websites develop salary information based off of actual pay data from professionals working in specific jobs and potentially represent the most current pay for the job titles at e-sonic. Follow the steps outlined below:
Section 2 Outline: Executive Summary Findings 1. Determine Appropriate Pay-Policy Levels for E-sonic Jobs 2. External Market Review a) Research market competitiveness using the free salary websites listed above, which provide salary data by title and region. b) Research trends about cost of living adjustments in e-sonic locations. Apply some discussion around leading, lagging or matching the market to the salary data you found in your market salary research. Assume that the salary research you are using is similar to benchmark jobs. Also, discuss whether jobs you researched would match the benchmark jobs or require more or less experience and talent than the benchmark job. c) Update salary data for inflation using CPI-U. 3. Implement Salary Survey Results a) Create pay grades and ranges by integrating external market data with internal pay grades. b) Evaluate and summarize decisions made for each job structure.
The External Competitiveness section is fully described in the MyManagementLab Building Strategic Compensation Systems casebook for faculty and students, linked in the course menu. Follow the explanations and outline to complete this milestone. Section 2: External Marketplace is due at the end of Module Six.
