LifeCare Assurance, a 150-employee insurance plan administrator in Woodland Hills, Calif., used to make compensationdecisions using a method long favored by small companies -- educated guesswork. "We tried to go by what felt appropriate,"says Carol Box, who oversees human resources at LifeCare. Then, however, 10 departing employees in a row all had thesame complaint about LifeCare: skimpy pay. Box concluded that the company's pay scales might need adjusting. LifeCare,which had 1998 revenues of $8 million, needed to get some relevant salary surveys to find out.
Box is not alone in her interest in comparative salary data. Fortunately, a proliferation of salary surveys, many of themavailable over the Internet, is making that sort of benchmarking more accessible to small companies. Of course, bigconsulting firms sell hefty compensation surveys, usually at equally hefty sums. But these days, trade associations, chambersof commerce, the U.S. Bureau of Labor Statistics, and state and local governments are all sources of relatively inexpensiveintelligence on market rates for compensation. You can also subscribe to a number of Internet services that will provide youwith comparative job/price data, either on a one-time basis or for an annual subscription fee.
The danger of using any survey is that you might end up with the wrong numbers or you might analyze the numbersincorrectly. Behind every survey is a set of assumptions and criteria. If you are unaware of them, you could be comparingapples and oranges, or computer programmers with program directors. Assessing the data in compensation surveys can betricky, but here are some key questions to ask.