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Compensation Case Study

Go to www.salary.com and select at least four jobs to analyze. Select at least three cities for each job. You can use the same three cities for all four jobs. Answer the following and show the salary data:
1. Which jobs are paid more or less? Is this what you would have expected? Why/why not? What factors could explain the differences in the salaries?
2. Do the jobs have different bonuses as a percentage of their base salaries? What could explain these differences?
3. Do the data include the value of stock options? What are the implications?
4. Read the job descriptions. Are they accurate descriptions for jobs that you would be applying for? Why/why not? Are there jobs for which you cannot find an appropriate match? Why do you think this is the case?
5. How could you use this information while negotiating your salary in your job after graduation? What data would you provide to support your "asking price"? What factors will influence whether or not you get what you ask for?
6. What is the relevant labor market for these jobs? How big are the differences between salaries in different locations?
7. For each job, compare the median salary to the low and high averages. How much variation exists? What factors might explain this variation in pay rates for the same job?
8. Look for a description of how these salary data are developed. Do you think it provides enough information? Why/why not? Discuss some of the factors that might impair the accuracy of these data. What are the implications of using inaccurate salary data for individuals or companies?
9. With this information available for free, why would you bother with consultant surveys?
10. If you were a manager, how would you justify paying one of your employees either higher or lower than the results shown on the website?

Solution Preview

I will analyze the following jobs: Operations Manager, Logistics Manager, Distribution Manager and Distribution Center Manager. The three cities for each job will be Dallas, Texas, Pittsburgh, Pennsylvania and St. Louis, Missouri.

1.) The median salary for an Operations Manager is $87,242. The median salary for a Logistics Manager is $92,993. The median salary for a Distribution Manager is $80,852. The median salary for a Distribution Center Manager is $88,488. The jobs are ranked by salary in the following order: 1st Logistics Manager, 2nd Distribution Center Manager, 3rd Operations Manager and 4th Distribution Manager. Yes, I expected the rankings based on the person within the organization that is the job's supervisor (Logistics Manager Reports to top management) and span of control (Distribution Center Manager manages the entire activities within the distribution center). Also, the level of education is factor in salary. Operations Manager, Logistics Manager and Distribution Center Manager requires a bachelor's degree; whereas, the Distribution Manager requires an associate's degree.

2.) Yes, all of the jobs have a bonus as a percentage of the salary. The bonus percentage is as follows: Operations Manager has a bonus of 4.1%, Logistics Manager has a bonus of 4.7%, Distribution Manager has a bonus of 4.2% and Distribution Center Manager has a bonus of 6.6%. The differences in the bonus could be explained by the span of control and who is the manager's supervisor. The Distribution Center Manager manages the entire activities within the distribution center. The Logistics Manager ...

Solution Summary

The compensation case study for www.salary.com is examined. Stock options are determined.

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