An alternative to the club survey involves assessing the relative size of the executive roles in question.Our consultant interviews each of the executives for approx. 1hr – 1hr 30mins, to obtain a sound understanding of each position, accountabilities, challenges and their roles in future planning and team management of the organisation.This process is not about assessing individual performance, rather understanding the position itself. ANSON uses the Mercer HR job evaluation methodology to analyse information from the interview process to determine the relative work value/size of each position. More information on the Mercer methodology can be provided upon request. Job evaluation is a process to measure the relative size or worth of positions, based on each role’s requirements for factors such as knowledge and experience, interpersonal skills, role/organisation complexity and decision making.
There is a well established, close link between the relative ‘size’ or ‘value’ of a role as defined along these dimensions and market remuneration within a particular sector /industry / geographic area.Work value is not dependent on the market at any one point in time, nor on individual performance, so it provides an objective basis to determine fair remuneration for each role. It also enables comparison of relative size of dissimilar positions. Outcomes of the job evaluation exercise will be discussed with the CEO prior to obtaining relevant market remuneration information which is generally both the WA not for profit sector and the private sector, to some extent. This information is obtained and presented for consideration.
General market remuneration information is derived from a sample of private sector organisations in Western Australia, excluding the mining sector. Not for profit remuneration information is based on data obtained in the sector by ANSON, over time and augmented by not for profit remuneration data from market sources. Both sets of remuneration information will provide explanations, including the estimated market positioning (eg: 25th percentile and 50th percentile), various remuneration aggregates (salary, fixed package and some discussion of at risk, performance based remuneration practices) and other related details.
This approach considers the market remuneration for these roles based on the relative size of the roles, an approach used by many organisations, particularly where it is difficult to obtain market remuneration information for specific roles.
To our knowledge, the only survey of not for profit executive remuneration rates specifically in WA was a survey conducted by ANSON for NDS last year. General Outcomes Job sizing provides the Board and CEO an indication of the relative competitiveness of current remuneration, compared with the WA not for profit market. It also provides an objective basis for determination of remuneration. For example, you might wish to consider whether your organisation’s executive pay should be at the median of the market (50% of organisations pay higher, and 50% lower), whether it wishes to be a leader and why. Unless such an exercise is conducted, it is not really possible to determine whether current remuneration is fair, competitive or otherwise. The information can be used to either review pay, if needed, for the executives concerned, or, if it turns out current remuneration is competitive, to explain this to the executives concerned.
In the absence of any other up to date, accurate remuneration information, it is difficult for management to know whether current pay is both fair and appropriate for the role being done and is justifiable, from a governance perspective.The loss of just one of the executives and their replacement time and cost, could well be much more than the cost of an exercise such as this and will give the Board peace of mind in relation to executive remuneration.
Remuneration Club Survey Benefits of Job Sizing