Can anyone explain to me the actual process and math used for benchmarking of compensation for employees and executives?
5 replies (most recent on top)
No
It's managed by HR through a goal seek objective function in excell : by including and removing industries and competitors, they arrive exactly at the salary number they want .... and in the many roadshows and presentation it s now magically benchmarked and fully aligned with industry standards
They calibrate using attrition data. If they are losing too many top quintile they change. IF they are not losing enough in bottom 2 quintiles, they PIP and freeze promotions and give sub inflation pay raises. It is still about competition. You need to hope top 3 quintiles are quitting. If they stay, then everyone in bottom 2 quintiles is sc--wed. Now they are working on the executive levels...notice how many are leaving and being replaced with non-exec CLs
They threw I Ching. Out the window. Now they are unanimous.
HR will survey other companies inside and outside oil and gas for related jobs to determine means and standard deviations for salary curves. Then they deduct 75% for EM. Then they factor in LC10 salary benchmarks to further reduce comp levels for HC10 employees. Lastly they conduct both dice rolling and voodoo chicken bones to arrive at 0% raises.