This salary data shows what XYZ, Inc. and its competitors are paying for certain

Question

This salary data shows what XYZ, Inc. and its competitors are paying for certain jobs. XYZ wants to use a “match” the labor market strategy for its pay level. Question 1. From this data, determine if XYZ is leading, lagging, or matching the labor market for each position and by how much. (Hint: Do not use XYZ company salaries in calculating the mean for the salary levels for each job.) Question 2. Assuming that these are the only three jobs that XYZ has. Determine if XYZ’s overall salary level for its pay structure is leading, lagging, or matching the labor market and by how much. Question 3. Based on your analysis, what recommendations would you make to XYZ regarding the salary levels of these jobs and why? Employer Job Title Annual Salary ABC Driver 18,719 XYZ Driver 19,302 Amco Driver 23,007 Acme Driver 26,455 ABC Supervisor 35,123 XYZ Supervisor 36,377 Amco Supervisor 37,897 Acme Supervisor 36,123 ABC Sales Representative 24,203 XYZ Sales Representative 23,708 Amco Sales Representative 33,178 Acme Sales Representative 29,777

Explanation / Answer

Answer:

1.

Driver Salary Market Average = Salaries in ABC + ACME + AMCO / 3 = 18719 + 23007 + 26455 / 3 = $ 22,727; Salary in XYZ is $ 19,302 therefore it is lagging by $ 22,727 - $ 19,302 = $ 3,425.

Supervisor Salary Market Average = Salaries in ABC + ACME + AMCO / 3 = 35123 + 37897 + 36123 / 3 = $ 36,381; Salary in XYZ is $ 36,377 therefore it is lagging by $ 36,381 - $ 36,377 = $ 4 (Note: one can also say it as matching).

Sales Representative Salary Market Average = Salaries in ABC + ACME + AMCO / 3 = 24203 + 33178 + 29777 / 3 = $ 29,052.667; Salary in XYZ is $ 23,708 therefore it is lagging by $ 29,052.667 - $ 23,708 = $ 5,344.667.

2. The overall Salary pay structure of XYZ is lagging by 3425 + 4 + 5344.667 = $ 8,773.667

3. Analysing the market average rate of salaries we recommend that XYZ should gradually increase its pay scale for the good performing employees because if they do not do so, they may loose the employees as their pay scale are quite lesser as compared to market averages; except in case of Supervisors Salary.

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