The process used to market price a job should be written and consistently followed. Here is an example.

1. Read, review, and compare job descriptions.

2. Choose compensation survey data. Two to three salary survey data sources are typically used.

3. Match jobs to survey data based on job responsibilities and not job title. Document decisions and determine market reference point for each benchmark job.

4. Assign pay grades to benchmark jobs based on the market reference point. Slot jobs into pay grades based on compensable factors if they cannot be market priced.

5. Compare pay grades, base pay ranges, and target incentives (STI and LTI) to employee pay. Recommend changes (if needed) and determine impact on budget.

6. Get approvals from key stakeholders.

7. Communicate and implement the pay grades, ranges, incentives, and employee pay changes.

8. Repeat this process every one to two years. In the year this process is not completed, increase the pay grade ranges by the data reported in annual salary planning and budget surveys.

This assumes the employer already has a compensation philosophy approved by the senior executive team and the board.

And it also assumes that the job architecture elements like job families, career levels, data integrity/governance, career paths, and compensation guidelines are in place.

For those of you who use a point factor methodology instead of market pricing, the process steps above need to be modified to fit your approach.

#compensation #rewards #compensationconsultant #hr #humanresources #pay #incentives #marketpricing #salarysurveys #jobdescriptions #STI #LTI #jobarchitecture