(WorldatWork Journal, 3rd Quarter 2006)

This paper examines the methods being used by organizations to evaluate pay programs. According to the more than 600 respondents participating in the study, the majority of organizations do not evaluate their base and variable pay programs, and about one-third of organizations assess the appropriateness of cost and bottom-line impact of their pay programs. Few organizations use rigorous research methods to collect and analyze the data they collect to evaluate pay programs. The authors found “Most Admired” companies were more likely to evaluate pay programs and use objective and formal methods for doing so than organizations that had not earned that designation.