BUSI 440 Week 5 Final Project Deliverable I: Wage Survey Example

Wage Survey Design Using the Benchmark-Job Approach: Lakeview Community Credit Union

Purpose and Pay Policy

Lakeview Community Credit Union serves about 48,000 members through nine branches in a mid-sized metropolitan area and employs 262 people. Its board has adopted a pay policy of matching the market median for most jobs and leading the market for hard-to-fill roles where turnover threatens service. In the past year, Lakeview lost four of its eleven mortgage loan officers and needed seven months to fill an information security position, while teller turnover rose to 38 percent. Management suspects that pay has fallen behind but has no current data; its last survey participation was three years ago.

The purpose of this survey is to measure the current market rates for Lakeview's benchmark jobs so that the credit union can compare its pay with the market, test whether its policy is being met, and build a new pay structure in the second deliverable. Milkovich et al. (2017) describe a wage survey as the systematic process of collecting and making judgments about the compensation paid by other employers, and they emphasize that each decision in the design, which jobs, which employers and which pay data, shapes the answer. Rynes and Milkovich (1986) made the same point forcefully: there is no single "market wage" waiting to be discovered, only estimates that depend on the choices made by the survey designer. This plan states those choices openly.

Defining the Relevant Labor Markets

Lakeview competes for different jobs in different markets, so the survey defines three.

Separate markets prevent a common error, in which a single local survey understates pay for professionals who are recruited by employers outside the area. Koss (2008) recommends defining comparison markets job by job for the same reason.

Selecting Benchmark Jobs

The group selected ten benchmark jobs using the criteria the course describes: the jobs have stable content, are common across financial institutions and other employers, span entry, professional and management levels, and together cover about 70 percent of Lakeview's employees. Non-benchmark jobs, such as the marketing coordinator and the facilities technician, will be slotted into the structure in the second deliverable by comparison with these anchors.

Choosing Comparison Employers

The survey will invite twelve employers directly and supplement their data with two published surveys. Direct participants are four credit unions and four community banks in the metro area, two regional banks with branches in the area, and two large local employers that hire customer service staff, a hospital system and a utility. The published surveys are a national financial institutions compensation survey, used for information security analysts and mortgage loan officers, and a state human resources association survey, used for the accountant and human resources jobs. Each participant will receive a summary report of the results in exchange for its data, which is the usual incentive for participation.

Data to Be Collected

Benefits appear in the survey because this week's chapters treat them as a major part of what employees receive, and credit unions frequently attract staff with retirement plans and paid leave as much as with salary.

Survey Questions

The questionnaire will be sent electronically by a third-party administrator. For each benchmark job, participants will answer the following:

• 1. Read the job summary. Does a job in your organization match it? Answer exact match, close match (describe the difference) or no match.
• 2. What is the title of your matching job, and how many employees hold it?
• 3. Report each incumbent's annual base pay as of the effective date, without names, or report the average, lowest and highest base pay.
• 4. What are the minimum, midpoint and maximum of the job's pay range?
• 5. What annual bonus or incentive did incumbents receive for the most recent year, on average?
• 6. For loan officers, what share of total cash pay came from commissions or production pay?
• 7. Do incumbents receive shift, language or other differentials? Describe them.
• 8. What date do these figures reflect?

A short organization section will ask for the employer's size, industry, planned pay increase budget for the coming year and a summary of benefits.

Testing the Survey Before Launch

Before sending the survey, the group will ask two friendly participants, one credit union and one community bank, to complete it and report any confusing questions or job summaries that were hard to match. The test will also show how long the survey takes; if it requires more than an hour, the organization section will be shortened. Matching problems found in the test will be fixed by adding duties to the summaries rather than by changing the benchmark list, so the jobs stay consistent with the second deliverable.

Timeline

The survey will be sent in the first week of the month, with three weeks for responses and a reminder after two. Analysis will take two weeks, and the summary report will reach participants and Lakeview's management six weeks after launch, in time for the budget cycle that sets next year's pay increases.

Confidentiality and Legal Safeguards

Sharing pay data among competitors raises antitrust concerns, since employers who exchange current, detailed wage information could use it to hold wages down. Federal antitrust agencies withdrew their older guidance on safe practices for wage surveys in 2023, and they now evaluate information sharing case by case. The group's design therefore follows conservative practices: a third party will collect and analyze the data, participants will receive only aggregated results, no figure will be reported for a job unless at least five employers provide data, no single employer's data will dominate a result, and the data will describe past pay rather than planned future rates for specific jobs. These safeguards protect participants and the employees whose pay is reported.

Analysis Plan

The administrator and Lakeview's analyst will analyze the data in five steps.

First, they will screen matches, excluding "no match" responses and reviewing "close match" responses to decide whether to include them, perhaps with an adjustment.

Second, they will age all data to a common date, the start of Lakeview's next fiscal year, using the median planned increase reported by participants. If participants expect 3.5 percent increases, data dated six months before the target date would be multiplied by about 1.0175.

Third, they will calculate several measures for each job: the unweighted mean, which treats each employer equally; the weighted mean, which treats each employee equally; and the 25th, 50th and 75th percentiles. Milkovich et al. (2017) explain that these measures answer different questions, so the report will show them side by side, with the weighted median as the main measure of the market for Lakeview's match policy.

Fourth, they will compare Lakeview's average pay for each job with the market median, expressed as a market index. An index of 0.92 means Lakeview pays 8 percent below the median.

Fifth, they will prepare the data for the second deliverable, which will combine market rates with job evaluation points to draw a market line and set pay ranges.

Illustrative Results Format

The table below shows how results will be reported. The figures are illustrative placeholders for planning, not survey results.

If the actual results resemble these, the survey would confirm management's suspicion that lending and security jobs lag the market most, while branch management is close to policy. Williams et al. (2006) showed across many studies that people judge their pay largely by comparison with others' pay and that those dissatisfied with their pay level are more inclined to leave, a pattern that fits Lakeview's losses in the jobs where its index is lowest.

Group Roles and Peer Evaluation

The group divided the work by section. Morgan Lee defined the labor markets and selected the comparison employers. Taylor Kim wrote the benchmark summaries and the survey questions after reviewing Lakeview's job descriptions. Jamie Ortiz wrote the analysis plan and the legal safeguards and built the tables. Riley Chen edited the full deliverable and submitted it for the group. Each member will complete the separate peer evaluation, and the group agreed that the same members will keep their sections when the benchmark jobs are evaluated in the second deliverable.

Conclusion

This survey gives Lakeview a defensible picture of its markets because every design choice is stated: three labor markets matched to how each job is filled, ten benchmark jobs with summaries precise enough for accurate matching, comparison employers that reflect real competitors, a complete list of pay and benefits data, and an analysis plan that ages, weights and indexes the results. The output will show where Lakeview's pay stands against its policy and will supply the market rates needed for the compensation structure in the second deliverable.

References

Koss, S. (2008). Solving the compensation puzzle: Putting together a complete pay and performance system. Society for Human Resource Management.

Milkovich, G. T., Newman, J. M., & Gerhart, B. (2017). Compensation (12th ed.). McGraw-Hill Education.

Rynes, S. L., & Milkovich, G. T. (1986). Wage surveys: Dispelling some myths about the "market wage." Personnel Psychology, 39(1), 71-90. https://doi.org/10.1111/j.1744-6570.1986.tb00575.x

Williams, M. L., McDaniel, M. A., & Nguyen, N. T. (2006). A meta-analysis of the antecedents and consequences of pay level satisfaction. Journal of Applied Psychology, 91(2), 392-413. https://doi.org/10.1037/0021-9010.91.2.392