The Compensation/HR professional may know about specific pay issues (high and low) in his or her organization. But what does the overall competitive picture look like? A high level snapshot can be invaluable for planning your spending on pay as well as identifying the need for special supplemental pay programs to remain competitive. It can also indicate whether your bonus programs deliver a competitive advantage or lag behind industry.
Pay lines are a nice visual for depicting how an organization's pay stacks up against its pay structure (midpoints/market points) and the competitive market. By using some basic mathematical regression techniques, you can develop a model using benchmark jobs that shows you where your pay is high and low and helps you funnel scare dollars to where they are most needed. Because regressions require a significant number of data points to yield reliable information, the technique is useful only for groups of 20 or more jobs spread across various pay levels or grades.
Remember, start with solid pay and market information if you want an answer that's meaningful.
Happy regressing!
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