Glossary

ERI Economic Research Institute is pleased to provide an expanded and updated glossary of commonly used compensation terms and formulas for your ongoing reference.

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Maximum Years of Experience

In ERI survey software data, maximum years is twice the normal career job incumbency period. This is two times the average number of years people hold this job (per Census and other survey reports). Beyond this point of maximum years you can expect to find very few people still performing the same job. This maximum years figure is the top number of years that accurately and reliably predicts pay differentials. The pay of those few who hold this job beyond the maximum year is not related to their total years of experience; i.e., if 5 years is the average, pay differentials are not reported beyond 10; the pay of those at 11, 12, 13 years, etc., remains best predicted by the 10-year level and has a spurious relationship with the years in excess of 10. Pay thereafter is related to some factor beyond years of total experience over the maximum.

Maximum Reasonable Compensation
McCarran Ferguson Act

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ERI Economic Research Institute was founded over 30 years ago to provide compensation applications for private and public organizations. ERI Economic Research Institute compiles the most robust salary, cost of living, and executive compensation survey data available, with updated market data for more than 1,100 industry sectors. ERI collects salary survey data from internal surveys, third-party salary surveys, and public sources to calculate geographic salary differentials and assist with compensation planning.

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Common Compensation Terms and Formulas

  • Includes the latest updates: Compensable factors, defined benefit plan, job leveling, lead differential, shift differential and more.
  • Salary structure formulas and strategies
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