How do companies decide how much to pay their employees?

[Orsorum]

Originally posted by: LordJezo
They say..

White male = x.

black male = x - y

white female = x - y - z

black female = x - y - z - a

asian = x + b

mexican = x - x

 

[DT4K]

The goal of any company is to pay as little as possible.
And to get the most productive and skilled employees.
Those two goals conflict with each other.
So a company has to make compromises on both goals to find some middle point.
Each company has a different way of doing this.
Some companies pay less and get less qualified employees.
Some companies pay more and get more qualified employees.

But most companies look at what all the other companies are paying for similar positions and tend to try to stay close to that level. It's all about supply and demand.

 

[optoman]

Dart Board, the more years experience you have, the closer they are when they throw the dart.

Most large companies have formulas. They look at experience, schooling, GPA and some other factors and will make an offer based on the outcome. They will adjust the offer if they feel you are a good match and they really want you.

With this economy, be happy that you can even get a job. I haven't worked in my industry in about 19 months and it doesn't look like I will be anytime soon.

 

[vi edit]

I "cost" (spent) my company over $200,000 this year so far...thankfully that doesn't come out of my salary

 

[Chaotic42]

They lower the wages until people start quitting. They then paid the minimum amount that won't make people quit.

Unless it's my company, then they take the level where people start quitting and divide it by 117.

 

[Aquaman]

Originally posted by: CPA
Most large companies look at industry averages, geographical averages and other economic factors. Then they design wage scales/grades and attempt to have all employees wages within a given grade average the middle of the grade when combined. Generally noone assigned a grade is paid below the grade floor or above the grade ceiling.

Most small and mid-size companies wing it and pay as little as possible.

Yup......... that's the ticket I actually got a huge raise when I worked for my last company. The Auditor did a review of salaries and decided that I was worth a lot more

Cheers,
Aquaman