5

COMP2000: Designing

a New Wage

Sur VCP &y ge LEVIN CRIMIMEL

OMP2000—the Bureau’s new compensation survey—will produce information

on compensation by occupation for many of the Nation’s metropolitan areas and

for the Nation as a whole. Data will be published on compensation—wages and
salaries and benefits—for different work levels within occupational groups for private
industry, State and local governments, full- and part-time workers, and other workforce

characteristics.

Background

Changes in the types of compen-
sation, new patterns in the industries
and occupations that make up the
economy, and improvements in
statistical measurement mean that
surveys need periodic revision. This
is one impetus behind COMP2000,
the Bureau’s new compensation
survey that integrates three existing
BLS compensation surveys into a
single one.

It will also provide an ever wider
range of outputs, improving the
timeliness, comparability, accuracy,
and relevance of data produced by
BLS.

Minimizing respondent burden is
also a key COMP2000 goal. Re-
sponding firms lose both time and
money when they use their resources
to respond to surveys. BLS has
increased outreach efforts in an
effort to help respondents realize the
tangible benefits gained by cooperat-
ing with the survey collection. This
article provides insight into the

Beth Levin Crimmel is a labor economist in
the Division of Compensation Data Estimation,
Bureau of Labor Statistics. Telephone (202) 606-
6250.

evolution of the design of this new
BLS compensation survey.

Sample design

The three current compensation
series—Employment Cost Index
(ECI), Employee Benefits Survey
(EBS), and Occupational Compensa-
tion Survey (OCS)—are collected
from two separate establishment
samples, ECI and EBS data are
obtained from the same sample;
OCS has its own sample, selected by
area to provide data on a locality
basis.

The ECVEBS sample reflects the
Nation’s economy as a whole.
Changes in and levels of wage and
benefits costs are produced, as are
information on benefit provisions
and incidence rates. The OCS
sample also is designed so that the
areas chosen can be used to generate
valid data for the Nation as a whole.
The area sample is used to meet the
needs of the primary user of the OCS
data—the President’s Pay Agent.
The President’s Pay Agent consists
of the Directors of the Office of
Management and Budget and the
Office of Personnel Management,

9 Compensation and Working Conditions December 1996

and the Secretary of Labor. The Pay
Agent analyzes the information as
part of the process of determining
comparability between local civil
service pay scales for white-collar
workers and those in the rest of the
economy.

The COMP2000 program will use
an area-based establishment sample.
To represent the Nation, 154
localities (81 metropolitan areas and
73 nonmetropolitan counties) have
been selected via probability sam-
pling techniques that resulted in the
largest metropolitan areas having the
greatest chance of being included,
The design will allow for the release
of data for most metropolitan areas
chosen (and some nonmetropolitan
areas), by region, and for the U.S.
The detail available will vary by
geographic coverage.

This sample will be implemented
in stages. In the initial phase of
COMP2000, an area-based sample of
about 24,000 establishments with 50
or more employees will be imple-
mented beginning in Fall 1996 and
culminate in 1997. This first sample
will replace the OCS sample.
COMP2000 will collect wage rates



by occupation and by work levels.

In 1998, one-third of all estab-
lishments in the COMP2000 survey
will be re-visited to collect data on
employer-provided benefits. The
introduction of benefit collection will
mean that ECI and EBS can be
produced from the COMP2000
sample, eliminating both as separate
surveys. In 1999, a full sample of
establishments with fewer than 50
employees will be introduced.
Sample rotation, with one-fifth of
establishments being replaced each
year, begins in 2000.' This allows
the sample to be kept current, while
minimizing the time most units are
asked to respond to the survey,
thereby reducing respondent burden.
Both wage and benefit data will be
collected from one-third of the new
units; the other two-thirds will
report wage data only

The new sample will have more
units than either of the existing ones.
However, the cost advantages of a
single sample are significant, both
for BLS and cooperating establish-
ments. It eliminates the need for
duplicate visits to the same establish-
ment to collect similar compensation
data. This minimizes respondent
burden, particularly for large
establishments that were often in
both samples. It will also reduce the
high cost to BLS establishment
visits, which typically are done at
least once for each unit. Also, less
information is requested from the
smallest companies, minimizing
their cost.

Finally, the new sample has been
designed to allow for release of
additional statistical series. Because
of the area design, indexes of
compensation change will be
available for some of the largest
metropolitan areas in the U.S.2

Identification of occupations

There is a similarity among the
three compensation series in that
they gather information by occupa-
tion. Both ECI and OCS collect data
on wages rates by occupation; the

EBS and ECI programs gather
benefit data by occupation.

But there are also major differ-
ences in the types of information
gathered. All three series collect
data by occupation, but use different
systems to classify those occupa-
tions. ECI and EBS use a method
based on that of the 1990 Census.
This method identifies about 480
individual occupations, which are
assigned to 1 of 9 occupational
groups. The occupations for which
data are to be collected are randomly
selected, with the jobs having the
most workers having the highest
possibility of selection.

In contrast, OCS collects data for
occupations that are identified from
a fixed list of occupations. The list,
composed of occupations commonly
found in the Federal white-collar
civil service, reflects the use of the
data for comparing Federal and
nonfederal pay rates. The occupa-
tions in the job list are also divided
into work levels. Because the
description of the work levels is
tailored to each specific occupation,
it is difficult to compare work levels
across occupations.

The new COMP 2000 method,
which is still being tested, relies on
the current ECI/EBS procedures in
its initial stages. Using an employee
list, a number (increasing with
establishment size) of workers are
randomly chosen. Each selected
worker is classified into 1 of 480
Census-derived occupations, and is
further identified as to union or
nonunion and full- or part-time
status, and by straight-time earnings
or incentive pay.

In the last step of the process, the
selected occupations are assigned a
work level. This step has the same
intent as the OCS leveling process—
to classify occupations according to
their duties and responsibilities. For
COMP2000, however, there is a
generic set of 10 factors used to rank
and compare all occupations. These
generic leveling factors, based on an
evaluation system used by the Office

of Personnel Management (OPM) to
rank Federal jobs, include: Knowl-
edge, supervisory controls, guide-
lines, complexity, scope and effect,
personal contacts, purpose of
contacts, physical demands, work
environment, and supervisory duties.

Within each factor, there are a
number of levels, each with a
description and points. The number
and range of points differ by factor.?
A level that best describes the job is
selected for each factor. Summing
the points across factors yields the
overall points for the job. The total
points determine which of 15 work
levels (as defined by OPM) the job
fits.

The new methods of determining
work levels have important implica-
tions for COMP2000. In the OCS,
wages by level were available for a
limited number of occupations and
were not comparable across occupa-
tions. In contrast, the COMP2000
leveling procedure increases the
likelihood of the most common
occupations in each locality being
selected, which greatly increases the
relevance of the data. It also allows
for comparisons of levels across
occupations. In addition, procedures
to determine the level of any job are
available from BLS so that data
users can replicate the technique.
This leveling technique also lessens
the burden on responding establish-
ments because the same generic
factors are used for each surveyed
job. For the same reasons, generic
factors also speed (and lower the cost
of) the training of the BLS field
economists who collect the data.

A series of tests has begun to
determine how well the new generic
leveling method works. The first of
these pilot studies took place in the
Albuquerque, New Mexico metro-
politan statistical area in February
and March 1996, Other areas in the
test include Allentown, Pennsylva-
nia; Rochester, NY; Salt Lake City,
Utah; Raleigh, North Carolina; and
New Orleans, Louisiana.

Compensation and Working Conditions December 1996 10



Table 1: Selected data for full- and part-time workers, private Industry and State and local governments,
Albuquerque, NM, February—March 1996

and level Mean hourty Em
Occupation group ployment
$12.84 273,889

15.62 151,204

20.63 52,436

22.66 38,423

21.00 4,120

24.53 4,791

96.71 3,693

20.36 2,961
Albuquerque pilot test. The table Certain benefits, such as sever- In quarterly updates, only rate
above highlights some of the data ance pay, that are both low in cost changes would be reflected.
available from the Albuquerque and difficult to collect, are likely to COMP2000 may replace the collec-
pilot. It shows mean hourly wages be excluded from the COMP2000 tion of rates and constant usage with
and employment for a variety of program. For other benefits, outside the collection of simple expendi-
occupation classifications. Data also _ sources may be used to obtain basic tures--figures taken from current
are available for private industry and _data needed to determine their cost. period usage and cost. Such data

State and local governments, by full-
and part-time status, union and
nonunion status, straight-time
earnings and incentive payments,
and by establishment size.

Benefit collection

While the OCS program collects
litle information on employee
benefits, the EBS survey is designed
solely to provide data on benefit
provisions and incidence rates. The
ECI also heavily relies on benefit
costs as part of its total compensa-
tion measure.

Collection of benefit information
can pose considerable respondent
burden. Companies are more likely
to refuse to supply benefit data for an
occupation than the corresponding
wage information. This problem is
compounded for the ECI where
quarterly updates of costs are
needed. For the new COMP2000
program, a preliminary plan for the
collection of benefits has been
developed. Testing of some tech-
niques will begin in early 1997. The
methods that follow will be evalu-
ated during those tests and therefore
are subject to change.

’ The current ECVEBS sample rotation is done.
onan industry basis, while COMP2000 units will
be rotated across all industries and areas. This
method smoothes the effect on the data of intro-

For example, rather than determin-
ing actual overtime worked for an
occupation in a particular establish-
ment, average overtime hours from
BLS’ Current Employment Statistics
(CES) survey may be substituted.
Cost can then be determined by
multiplying the CES hours by the
occupation’s hourly overtime wage
tate. Statistical modeling may be
used for other benefits to estimate
their costs. In that way, they would
not have to be collected in every
establishment,

The ECI program has always
attempted to hold the usage of
benefits constant over time, so that
the quarterly indexes only reflected
changes in rates and plan provisions,
not in elements like seniority, which
affects vacation plan costs, or
employee choice, which affects
health care costs. During the initial
collection at an establishment, this
required that companies report
figures for both the rate charged for
the benefit (for example, the family
coverage premium for a health
maintenance organization) and the
number of employees with this
coverage (often difficult to obtain).

—Endnotes—
ducing new establishments,
2A detailed description of the new area de-

sign will appear in a future issue of Compensa-
tion and Working Conditions,

11 Compensation and Working Conditions December 1996

Tequirements may simplify collec-
tion significantly.

Another new procedure concerns
the frequency with which benefit
costs will be updated. For the ECI,
each benefit’s cost is reviewed
quarterly. Under COMP2000,
some benefits will be updated that
often; others will be updated
annually. Still others will only be
updated under special circum-
stances. Updating benefits will
depend on past experience as to the
frequency of cost change. For
instance, with ECI collection it
has been found that, in a given
establishment, the health plan
premiums are usually changed on
an annual basis. So updates to
health care costs may only be sought
once a year.

The Bureau expects these changes
in benefit collection methods will
result in a reduction of the time
spent by firms responding to the
survey. The reduction in time is
expected to increase response rates.
In addition, costs will be reduced for
BLS as staff spends less time and
resources collecting, processing, and
analyzing data.

> Supervisory duties is a new factor devel-
oped by BLS. It is not included in the OPM point
factor system. At the present time, no points are
assigned for supervisory duties.