Methodology for PayScale Tech Company Review

1. Overview

Using PayScale.com's extensive database, we examined the characteristics of the following large/well-known tech companies: Amazon.com, Inc., Apple Computer, Inc., Dell, Inc., Facebook, Inc., Google, Inc., Hewlett-Packard Company, International Business Machines (IBM) Corp., Intel Corp. and Microsoft Corp. These characteristics include:
  • Job Details: common jobs, typical pay, typical tenure at the company, and typical years of experience within a career/field
  • Demographics: typical age and gender breakdown
  • Job Soft Features: These are measures of the satisfaction level, stress level and flexibility level relative to the national average of all employees who hold at least a bachelor's degree.
  • Benefits: common benefits relative to the average employer, commonness of health benefits, and typical weeks of vacation
In examining the characteristics of these companies, we eliminated retail workers from the sample:
  • Of the large tech companies examined, Apple is the "only" one to have a large retail section.
  • For this reason, we eliminated retail workers and retail managers from our sample.
  • Note: We did keep in all other workers from software developers to financial analysts to marketing assistants and thus did not further limit the sample to just IT workers, as it takes more than IT to make a business run.
2. Definitions

Total Cash Compensation (TCC):
TCC combines base annual salary or hourly wage, bonuses, profit sharing, tips, commissions, and other forms of cash earnings, as applicable. Total cash compensation does not include equity (stock) compensation, cash value of retirement benefits, or value of other non-cash benefits (e.g., healthcare).

Median Pay:
The median pay is the median (50th Percentile) annual total cash compensation. Half the people doing the job earn more than the median, while half earn less. This also is referred to as "typical pay."

Range in pay within a job can be very wide depending upon job choice, years of experience, scope of responsibility, number of employees, location, etc.

Pay Premium/Loss: Overall, when holding all else constant, this is the percentage difference in pay from working at the specific company over similar workers doing similar roles at other companies.

Profitable tech companies tend to pay a premium. For example, workers at the tech companies examined here earn pay, on average, 11 percent higher than similar workers holding similar roles at other companies.

Note: This percentage includes all workers (not just IT workers) with the exception of retail workers and retail managers.

Years of Experience: These are the number of years the respondent has spent in their field or career. Therefore the years of experience will incorporate all applicable jobs in the field, not just the current job.

Starting Median Pay: This is the national median pay for starting employees, which are full-time employees with five years of experience or less. For workers included in this data set, the typical starting employee has 2.5 years of experience.

Mid-Career Median Pay: This is the national median pay for mid-career employees, which are full-time employees with at least 10 years of experience. For the workers included in this data set, the typical mid-career employee has 15 years of experience.

Age: This is the median age of full-time, non-retail workers who work at the given company. The national median age for all full-time (non-retail) workers is 35.

Percentage of Male/Female Workers: This is the percentage of workers within a job that report their gender to be male or female. The average percentage of female workers across all full-time (non-retail) jobs and all employers is 52 percent.

Years with Employer (Tenure): These are the number of years the respondent has worked for their current employer. The average tenure across all full-time (non-retail) jobs at all employers is 3 years.

Common Benefits: These are benefits common to the specified company relative to their commonness at all employers overall. We chose to look at benefits in this way since the overall top benefits for all the companies are the same: 401(k), paid vacations/holidays and life/disability insurance.

By comparing benefits at a company to the typical benefits overall, we can observe benefits that are more common at a given company relative to the national average even if they aren't the most common benefits overall at the company.

Job Soft Features: These are measures of the satisfaction level, stress level and flexibility level relative to the national average of all employees who hold at least a bachelor's degree.


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