Pay Survey vs. Pay Study . . . That is the Question?

by Carey Klosterman on August 22, 2016

in Compensation


There seems to be some confusion around the question of what is a pay study vs. what is a pay survey. During a time when compensation related issues are extremely challenging, I thought it was a good opportunity to explain the unique elements that make a pay study a study, and a pay survey a survey.

I speak with organizations often that say they need a “pay survey” done when in fact what they really need is a study done to find out the “going rate” for a particular job, or they want their pay practices in general evaluated.

Key components of a pay study

  • Pay studies are evaluations typically based on a formal job description or complete list of the duties/responsibilities/education/experience for a job and evaluated against similar jobs in the market place.
  • Pay studies typically involve researching various available survey sources that may be general in nature or specific to a certain industry. Based on the job description or list of duties/responsibilities, a comparable match is found in the survey sources and is used to evaluate and market price an organization’s job(s).

Pay surveys differ from studies in that they are primarily a “tool” utilized when conducting the actual pay study. In general, a pay survey is used to determine the compensation paid to employees in one or more jobs.

Key components of a pay survey

  • Compensation data is typically collected from several employers and compiled in a report called a pay or salary survey.
  • Survey reports illustrate distribution statistics relative to the respondent data which provides an array of data based on where the 10th percentile through the 90th percentile of the sample may lie. In more general terms, this simply means that pay or salary surveys can be used to find out what the low, average and high pay levels are for a given job based on data from employers who participate in wage surveys.

It’s important to recognize that it may take a true study to utilize the full potential of a pay or salary survey and to formally evaluate job(s) and/or develop a compensation structure.

In a time when organizations are facing many challenges concerning the implication of wage levels on recruitment and retention, as well as compliance with new laws and regulations around compensation, knowing the difference between a pay study and a pay survey is very useful knowledge. Understanding how they differ will help you identify what you may need.

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