A recent question on a LinkedIn Compensation Group created a flurry of responses from seasoned compensation professionals. The regular blogger asked, “Job Evaluation, Underused or Overcooked?” One of the seasoned compensation professionals stated that job values should be determined by equally subjective judgments while others made cases for pure market pricing, internal job valuing systems (ranking or point/factor) and/or a combination of internal and external job worth processes. Since the question implies job valuing or job worth, I thought it would be good to share a previous blog entry on Job Worth.
Are you worth more or less than average? The context happened to also pose a potential gender aspect as well, but let’s see if I can refrain from getting into too much trouble today. Shouldn’t the question we always seek to answer be, “What am I worth?”
Finding the answer demands the poser to consider the context. In the above-mentioned piece our heroine did her research and determined the average salary for her position, and then compared herself to that. I have two additional questions: how did she determine that the average was indeed the average for her particular situation, and how did she determine where she stood relative to the “average”?
Determining absolute or relevant worth requires that one can establish an appropriate benchmark and is able to assess themselves against consistent standard criteria. Worth inevitably is equated with salary. To that end, market studies are continually evaluated to determine average, minimum and maximum salary ranges. But the “average” salary for an accountant in Arkansas may be significantly different than one for an accountant in California. Furthermore, the timing of the survey and the underlying job description for the title accountant may also be significantly different. In addition, we have observed significant swings in pay averages by job title from one year to the next year.
Data is good, information is better, and context is everything! If the so-called average salary for a position is defined in the terms of the context in which it was determined (region, date, industry vertical, company size, etc.), and the specific job description can be evaluated for its relative worth to the organization, then and only then, can somebody be reasonably assured that they can assess their worth in the only appropriate context, that is your company.
By all means, research what similar firms pay people in similar situations, but insist that your company determine the relative value of a position based on an accepted and proven methodology which allows sound, valid and informed compensation decision-making. Once you’re satisfied with your external pay research and the company’s efforts to develop and implement a fair job valuing system, then ask for a variable incentive pay or bonus program that rewards high performing employees since merit programs lack the funding to differentiate and drive company and individual performance goals.