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Common Compensation Terms & Formulas

Linear Regression Analysis Simple linear regression analysis shows the relationship between an independent variable such as Pay Grade (x-axis) and a dependent variable such as Salary Range Midpoint (y-axis). Example: Midpoint $ (Y) = ($5,714.30 x Pay Grade (X)) + $19,286 (this is the amount of the Y intercept) Gross Up

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How to Conduct a Job Evaluation - ERI Economic Research ...

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The process of defining a job is called job analysis. The information obtained in job analysis is recorded in the precise language of a job description. There are several job evaluation methods from which to select. The most prevalent one, the Point Factor Plan, uses a quantitative approach that will be explained in this guide.

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Planning Global Compensation Budgets for 2019

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ERI Economic Research Institute I Planning Global Compensation Budgets - 2019 2 As we prepare for 2019 global financial budgeting, it is helpful to take a look at both the

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How to Manage Salary Compression Issues

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compensation, for example, at a 1.05 or 1.10 compa ratio. For these job offers in excess of the desired new hire compa ratio, a compensation review as well as department head approval for compa ratios over 1.05 or 1.10 can help minimize compression issues between new hires and existing employees.

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Developing a Competitive Salary Structure

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1) Participate in three or more salary surveys including the desired industry, location, and jobs. 2) Collect internal data and salary survey results. 3) Identify and match benchmark internal jobs to external marketplace using job documentation. 4) Develop an external market summary and age the survey results to your desired salary structure date.

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How to Develop an Organization Pay Policy

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the salary survey data to the current date and then apply the new salary structure. If a change in the labor market of 10% is assumed for the next year, then the only time the organization will be competitive with the market is at the beginning of the year. By the end of the year, any decisions based upon the salary structure will be 10% behind the

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How to Design an Annual Incentive Plan

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An annual incentive plan is an important component of the overall total compensation program. It is the most common of all short-term incentive plan practices and includes a performance period of one year or less. An effective annual incentive plan will motivate plan participants to ensure the accomplishment of individual, team, business unit, and/

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