By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published July 9, 2019
Using a compensation survey is not an easy task. With so many statistical figures used to report a dataset, many HR professionals become confused and wonder “Which number should I be looking at?”
You might be having this exact experience right now. HR Source just published the 2019 edition of one of our most popular compensation surveys, the Metro Chicago Compensation Survey. Members of HR Source who participated in the survey already received their free copy of the final report. And if you’re anything like the staff of HR Source, you dove right into the fresh data.
When reading a compensation survey, most HR professionals focus on one of three numbers:
- Average Rate of Pay – The average is calculated by dividing the sum of all pay rates for a given job by the number of organizations responding.
- Weighted Average – This figure represents the average weighted by the number of employees. It is the sum of all rates divided by the number of employees reported.
- Median (or 50th Percentile) – This figure is the middle value of a distribution of rates. When the values or rates are arrayed in order from lowest to highest, the median divides this distribution so that an equal number of items are on either side of it.
The standard practice at HR Source is to use weighted averages as the preferred benchmarking number, subject to an organization’s pay philosophy and prior practice. However, each statistic has its own pros and cons. So, the Metro Chicago Compensation Survey publishes all three for general use
Interested in knowing more about market benchmarking best practices? It’s not too late to sign up for our market benchmarking class on July 11th .
If you would like to get your own copy of the 2019 Metro Chicago Compensation Survey, don’t delay! Visit our website for more information about the survey and to purchase the final report.