internal value + marketplace price = total equity

Merces approach to management and staff compensation involves identifying and solving both internal equity and external competitiveness issues, and ensuring that individual contributions are rewarded. We help you develop the three essential building blocks of good employee compensation:

  • Valuation of jobs through a formal internal equity approach
  • Competitive pay structures tied to appropriate market data
  • Individual pay based on proven long-term employee performance

What is the value to your organization?

While the Merces approach does have templates and outlines based on our 25 years of operation, each compensation program is tied directly to your needs.  Our experience has demonstrated a direct correlation, immediately and over the long term, between management involvement and implementation success. We involve your management staff directly, so the end product truly is yours, not “the consultant’s idea.”

The labor market is an inconsiderate beast, often hard to control or even respond to. Attempting to manage pay opportunities for each job by simply following annual shifts in the labor market is a fool’s errand. The solution? Reconcile the internal value of jobs (job evaluation) with the external value of jobs (market research).

Merces’ pay structures are built on simple statistical models that can be represented graphically like this:

The line on the chart represents the target position for compensation and ranges that can be built around it. Each range is divided into zones that represent pay appropriate for various levels of performance.

New market data can be collected annually and incorporated into the model.  Instead of a series of dozens of market data points moving up and down, this coherent line keeps the entire structure tied to the market.

Merces programs are designed to be run by your organization, although we are available to assist or to take on a role in administration.  Most Merces clients retain our firm on an annual or biennial basis to ensure that the pay ranges are maintained at competitive levels.