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Depending on your industry, compensation costs may be as much as 80 percent of your organization’s total expenses.  Are you managing them as best you can?  It seems sometimes that organizations spend more time worrying about their next cell phone purchases than their payroll budget.

A strong compensation program is a must for an organization to be strong.  A robust compensation program not only improves the ability of an organization to compete, but removes many of the obstacles to high level performance, such as employee discontent and disengagement, the time and money wasted on employee turnover and the distractions caused by investigations and litigation.

Merces has developed a structured approach for assessing the strength of an organization’s compensation program, including these key characteristics:

  • program governance
  • job documentation
  • pay structure design
  • internal equity provisions
  • market competitiveness
  • performance management
  • pay increases and administration

Merces’ analysts can review your current program and provide specific recommendations for areas of improvement that you can undertake on your own or with the help of anyone you choose.



Information Request

Once the organization has decided to proceed, Merces will send a detailed information request which will include policy and program documents, samples of job descriptions and forms.  Merces will also need an employee roster with some demographic  information, to help us analyze your actual practices.

When the information is received, a Merces analyst will conduct a preliminary review, and may contact the organization for further information or explanation.  This may continue throughout the project.

Review & Analysis

Merces follows a structured analysis template that covers the depth and breadth of compensation programs, from how compensation philosophies are set, through the methods of establishing pay structures and the implementation of programs.  Each element of the program will be reviewed and analyzed, and compared to best practice standards.

Merces will review the labor market for a sampling of the organization’s  jobs and compare that information to current pay and any existing pay structure. Finally, a review of current pay levels will be conducted to determine whether there appears to be any patterns, either adverse or favorable, and the extent to which these patterns may be problematic.

A draft report will be prepared, which Merces will share with the organization’s project manager.  This will provide the opportunity to collect any information that may have been missed in the information gathering phase, or to provide explanations to the way programs have been designed or implemented.

Report & Recommendations

Merces will prepare a final report and presentation to be given to the appropriate organization representatives — ownership, governing boards or management.  The report will include specific recommendations for changes, and, if appropriate include a proposal from Merces describing how these changes could be made.

Market to Actual Pay Comparison

Percent Difference - Actual from Market

Comparison of Internal Value to Actual Pay



Merces is typically available to begin work on a project within three weeks of an organization’s direction to proceed.  A typical review of this type will take three to four weeks to complete, following the client’s delivery of requested information.


Professional fees are quoted in a formal proposal for each potential project.  Not including any travel time or additional requests, expect the cost of this review to be about $4,500.