Just sharing what I learnt from market pricing course on aging data...
According to World at Work, the objective on Aging Data:
Apply the annual aging factor to estimate current compensation levels.
This practice is also known as trending or advancing the data.
The formulae:
(Number of months to age / 12 months) x Annual Aging Factor = Survey Aging Factor
How to determine the aging factor, it depends on your company compensation philosophy.
1) Lead the market - to position pay levels ahead of the market until the market catches up;
2) Lag the market - to position pay levels at current market level & lag as the year progress;
or Lead- lag..depending on the skill sets of workers that you required.
Other factors to consider included projected salary surveys from:
1) Government statistics; &
2) Sources like World at Works or Mercer..various survey providers
My 2 cents worth..
