This chapter follows the lead of Chapters 5 and 6 and takes the internal structure developed for an organization and matches it to external data. It is important to have external data from places from where organizations will be drawing workers and to where workers might go if they leave. This leads to a discussion of how a large number of organizations develop their compensation systems. The chapter ends with a case study of how problems can arise with this sort of system. It is important to learn how organizations set pay systems, especially if you want to learn how to earn more.

Data and Surveys: How Do We Tell What Other Organizations Pay? Filling Out a Survey

Now that we have spent time in Chapters 5 and 6 describing how an organization can make its internal systems logically consistent, it is time to consider collecting some external market data. Collecting the data is a relatively straightforward process, but there are many, many ways that problems can arise. Therefore, it is worthwhile to be very careful about it. I often feel that when users of externally generated data obtain it, they think that the data are all nice and clean and clear. This is certainly not the case. This first came to me when I was helping some of my PhD advisors collect data for a statistical study of the relationship between earnings and education using data on twins at the Annual Twinsburg Twins Festival in Twinsburg, Ohio. As a graduate student at the time, I had frequently used data from the U.S. Census or the Current Population Survey in the past, and the initial tendency was to blindly march forward and use the data. Actually watching people answer questions led me to think carefully about the source of the data (even though we were collecting the data exactly the same way the Census Bureau was doing it).