Examples of Compensation Audit Questions


OFCCP will typically begin the compensation interview with something like the following: “We did an analysis of your compensation data, there was an indication of possible discrimination. Thus the reason for this discussion and interview.” When asked a direct question, it is OK to say, “I don’t know” or “I need to research the answer to this question and get back to you with an answer.” There will be a copy of the transcripts sent to all people in the interview within the next week or so for review, comment and follow-up. You may send in additional documentation that has been requested.

Types of Questions

What is your in role compensation?

How many years have you been in your present position?

Does your company have written guidelines on compensation administration?

May we have a copy of them?

Does your company have pay grades or bands?

Does your company provide training on compensation administration to managers at the corporate establishment?
Can you explain to which managers the training is provided? Every single one or only certain managers?

Who  determines the starting salary for a new employee for your company?

Is starting salary negotiable?

What are the parameters within which a candidate can negotiate salary?

Are all new employees given the opportunity to negotiate their starting salary? If so, describe.

Does your company consider the following when setting/negotiating starting salary:

  • Education level?
  • Training Certifications?
  • Related Work Experience?
  • Prior salary?
  • Salaries of internal employees within the job unit?

Can you think of any other factors that would affect the starting salary of an applicant?

Is anyone hired above or below range for positions? If so, describe the situation and what happens? Who is knowledgeable of this if it happens?

Who has final authority on salary determination?

Is the starting salary determination made for incumbent employees for a promotion? How is this amount determined?

Which of the following could result in an increase in salary for an employee to increase after being hired:

  • Promotion?
  • Annual performance evaluation?
  • Cost of living adjustment?
  • Market rate adjustment?
  • Internal Equity Adjustment?
  • Matching job offer?
  • The employee requests that he/she receive a raise?

Are there annual performance increases? Are they based on anything? When are they and how often do they happen?

Please explain the performance evaluation process?

Who does the performance evaluations?

At what level do these need to be approved?

Clarification questions regarding the reporting structure of the approvals of performance evaluations.

What standards are employees measured on?

Do employees receive numerical performance evaluation scores or descriptive scores?

Are there differences between the way non-exempt and exempt employees are identified or evaluated for performance review?

Please describe the eligibility for the following for non-exempt employees:

  • Overtime?
  • Bonuses?
  • Commissions/incentives?

Which positions are eligible for incentives?

In sales positions would all of those employees in that job group be eligible for the incentives?

What HRIS do you use for compensation tracking and how long have you used that system?

Do you conduct periodic internal audits of compensation?

Can you describe the process and on what basis these analysis are done

Can you think of anything to add concerning the company’s policies, or information as it relates to the employees compensation program?