As I described in my series of posts on How To Develop A Compensation Program, the market comparison is the key component of any well-documented compensation program. It is the tool used to evaluate recommended increases relative to the market. (Given the need to do some calculations comparing current and proposed salaries, the table should be built in a spreadsheet application, like Microsoft Excel.)
The table contains the following:
- List of Actual Positions
- List of Comparison Positions
- Current Annual Salary
- Proposed Annual Salary
- Comparison Data
- Percent of Market – Current
- Percent of Market – Proposed
Positions are listed along with their current and proposed annual salary amounts. On the same row, the comparison position (from the market data) is listed along with the market data for the position. The comparison market data is usually shown in several columns, going from “Minimum to Maximum” annual compensation amounts. (View an example of a Market Comparison Table HERE.)
The purpose of the table is to evaluate the current and proposed salaries relative to the market. A key piece of the comparison is a determination of which piece of comparison data will be used for the comparison. In other words, what is the church’s “strategy” relative to compensation? Does the church want to base its compensation levels on the “market average?” Above average? Below average? Several factors are taken into consideration to make this determination. For example, from what “pool of candidates” does the church normally find staff. Are they coming from inside the church or outside? If they are coming from inside the church, how does the church compare to similar positions (outside the church?) in the local market?
The idea is to try to move salaries to be equal (100% of) to the market comparison amount. Make sense?