Pay. It’s a highly sensitive and emotional topic. Most people don’t like to talk about it, myself included. It makes us uncomfortable. No matter how good you are at your job, it’s always difficult to answer the question, “What am I worth?”
Every employee asks this question and we’ve had to answer it more than the average company. We hired about 275 people in the past 12 months in pretty much every type of position. I feel this gives us the best data to determine what positions currently pay in the market.
I know it’s common for employees to look to the Internet, a neighbor or a colleague to compare pay. The data is available, but this is not a good way to do research because often times these sources are not comparable or reliable.
At Marco, we use a variety of resources to bring objectivity to the equation and determine fair compensation for each position. We want to pay in the upper quartile in our industry, so it’s important that we know what the market is offering. In addition to using the benchmarks gained through our recent hires, here are a few other ways we validate pay:
1. Employer survey reports on compensation
We participate in and use compensation survey reports from several employer associations. We have found them to be one of the better resources for obtaining pay scales for common administrative-type positions by region.
2. Industry and peer group associations
Marco is a member of numerous industry and peer group associations and it is common for us to share best practices. Obviously, compensation is a critical component to hiring and retaining good people so it is often a point of discussion in these meetings. We encourage our managers to participate in these groups to better understand the market for specialized positions, such as our IT engineers, sales professionals and Managed Service specialists. These are sometimes the most difficult positions to fill so it’s important to validate what they are worth.
3. Third-party consultants
We engage third-party consultants to evaluate pay for specific positions, such as executives and managers, based on responsibilities, geography and revenue size. As Marco has grown, we’ve had to dynamically adjust compensation accordingly. When we initially started this third-party consultative process, we had a number of positions that fell below recommended ranges, and we made fairly significant adjustments to some salaries – as high as 20 percent.
4. Annual employee survey
We ask a series of questions in our annual employee survey to get feedback on how employees feel about their compensation. We ask team members to rate statements like “I would stay at Marco even if I was offered a job with significant higher pay (i.e.: 10 percent).” We received a 3.84 on a 5-point scale on that question in the last survey. I consider that favorable and know that when it comes to compensation, a perfect score is unlikely. We realize that when people answer questions related to pay, there is a psychology not to indicate complete satisfaction; but we still consider this to be useful information.
Having a consistent and objective process is a good way to establish trust in your compensation system. Whether it’s a new hire, promotion, annual review or acquisition, we pay close attention to this sensitive subject. Because we have had so many recent new hires, we’ve really been able to accurately validate our system, and as a result continue to pay in the upper quartile of our industry. If you have any interest in our sources, feel free to comment and we’ll get you that information.