External Competitiveness

MDI Gurgaon
12 Feb 2024
Lecture#6 Summary
• External Competitiveness
• What shapes External Competitiveness?
• Compensation Benchmarking Surveys- Industry, Database, Sponsored
Compensation Benchmarking Survey Steps- Consultant

Step1-Survey Planning
∙Defining comparator basket
∙Scoping of job family &
levels
∙Job profiles & descriptions
∙Reporting formats and
analysis
Step2-Market
Benchmarking
∙Job Matching
∙Establishing job
equivalence
Step3- Presentation of ∙Questionnaire design
Survey Findings ∙Data collection &
collation
∙Data Analysis & ∙Data verification
Interpretation
∙Report generation &
presentation
∙Participant Report
∙Client feedback
WHAT IS THE MOST
ST
IMPORTANT 1 STEP OF
ANY COMPENSATION
BENCHMARKING SURVEY?
Survey Planning- Most Important Steps

1. Choosing Comparator/Competitor Basket- by Sponsor

company
2. Job Matching- by Sponsor company & Consultant
COMPENSATION BENCHMARKING
SURVEY – JOB MATCHING
Survey Planning-
Step 1a - Benchmark Positions
The sponsor company & consultant discuss, select & agree on

benchmark positions that are

– Unique

– Critical

– Span across functions

– Span across levels

– Min Qualifications

– Average Experience
Survey Planning –
Step 1b- Job Matching
The sponsor & consultant discuss & review the Job Descriptions of the
benchmark positions.

This includes understanding

a. Position objectives: key deliverables, impact on products/services, customers,
environment
b. Primary Responsibilities: activities which occupy 80% of total time
c. Additional Responsibilities: that are performed occasionally
d. People Responsibility: performance assessment, leadership, recruitment,
development
e. knowledge & Skill requirement: Min qualifications, experience
essential for carrying out the primary responsibilities

Helps club similar jobs & differentiate unique jobs

 COMPENSATION BENCHMARKING
SURVEY -Data Collection, Processing &
Reports
Step2- Data collection for Survey
After job matching is completed, Consultants collect
1. Salary data (component wise) from participating companies
2. Information on benefits (Type, coverage, value etc.)
3. Variable pay data (Both target & actual paid), data on commission etc.
4. Long term incentives
5. Any other salary component

Data is processed by consultant, put in standard formats and validated by the

participating company
Step3-Presentation of Survey Findings
Typically both Quantitative Reports & Analysis and a trends report is provided.

1. Quantitative Analysis typically includes a report for various salary component

combinations (as requested by sponsor). Multiple statistics/percentiles are
reported
• Basic Salary
• Basic + All Allowances
• Basic + All Allowances + Variable Pay
• Basic + All Allowances + Variable Pay + Retirals
• Basic + All Allowances + Variable Pay + Benefits (costed Value) + Retirals
• Any other customized component (as requested by Forum or Sponsoring Company)

2. It may include reports/analysis at different levels

• Management level/ grade
• Job family/ sub family & grade
• Employees
• Any other
Presentation of Survey Findings
Quantitative report typically includes benefits practices and other trends like
• Insurance
• Retirement Plans
• Company Car
• Loans (Study, Housing etc.)
• Special/Unique benefits
• Others (salary increase, inflation trends etc.)
COMPENSATION BENCHMARKING
SURVEY -REPORTS
Benchmark Position Report

P LE
SA M

L8

L6

L6
COMPENSATION BENCHMARKING
SURVEY – USAGE
Using Survey Results
1. Compensation Benchmarking results can be used for salary
positioning analysis at multiple levels like
– Grade/ Management level
– Job family/ sub family
– Line and Support functions
– Employee wise

2. Creation of pay ranges

Using Survey Results- Gradewise analysis

Co. # of Average of Median of Survey

Grade Designation Employees Emp CTC Emp CTC Median Difference
2 Executive 80 383,000 366,000 418,000 -14%
3 Senior Executive 130 575,000 555,000 582,000 -5%
4 Assistant Manager 90 748,000 735,000 726,000 1%
5 Manager 40 1,304,000 1,291,000 1,375,000 -7%
6 Senior Manager 25 2,011,000 1,949,000 1,899,000 3%
7 AGM 15 2,547,000 2,411,000 2,799,000 -16%
8 GM P6LE 4,150,000 4,146,000 4,065,000 2%

SA M
Using Survey Results- Job Family/Department wise
analysis

Emp CTC
Co. # of
Survey Median
Grade Designation Emp Average Median Difference

3 Senior Executive 10 536,900 500,500 427,000 17%

Assistant
4 Manager 15 664,700 657,200 646,400 2%

5 Manager 12 1,196,200 1,078,500 1,252,000 -14%

PLE
6 Senior Manager 5 SAM
2,183,800 2,262,000 1,579,000 43%
Budgeting for Salary Increase
• Most consulting companies conduct a salary increase survey around
December – January
• They poll companies across industries on the average increments they are
budgeting for in the coming year
• A report is presented industry wise about the projected salary increase that
is being budgeted
• It helps companies get the market trend and plan their own budgets for
salary increases
Implementing Survey Results- Corrections
Salary Corrections/ Adjustments
• Study, highlight & discuss functions/ sub functions with high variance
• Select critical talent/ teams for immediate corrections
• Supplement with exit & hiring data
• Create salary correction plan and estimate budget
• Get budget approval
• Communicate to HR & Fin budgeting teams
• Plan and create salary correction plan. Communicate to key stakeholders
Implementing Survey Results- Creating Pay Ranges
Pay Ranges
• Study Market data across positions/levels/ Functions
• Analyze & compare with desired positioning in the market
• Create Pay level ranges for each level & functions (basis the overall pay
level positioning)
• Get Leadership approval
• Communicate final pay ranges to respective stakeholders (Top
management, HR & Hiring team)
 Questions?

2/18/2024 Confidential