Going Rate is a part of the compensation & benefit structure of an organization, where the focus is on how the employees are being paid.

 It is basically being paid according to that of the industry standards, or what the other companies in the region are following. Going rate is a part of the competitive compensation for any employees.

Working of the going Rate

1. Benchmarking the compensation & other related policies in the industry

2. Identifying where the company stands with relation to the benchmarked companies

3. If any gaps or shortcomings are present, try to make up for it.


1. Helps remove some of the discrepancies related to compensation for the employees.

2. The employees won’t feel that they are paid below the industry standards

3. Sometimes it is not only the compensation but also the nature of the job which becomes a part of the going rate.


1. Benchmarking may take a long time & cost involved may also be high

2. Going rate focuses on identifying the compensation gaps that are prevalent in the organization or the industry, but does not focuses on aspects like skill gaps, employee attitude etc.

3. Not all data could be easily available to process the going rate information, as some may be confidential.

Going rate does helps the companies in any industry have a competitive edge over others by means of understanding where the gaps & problems lie.

However, keeping the compensation only related to going rate won’t solve any purpose. The idea should be incorporate going rate along with retention based compensation (extra bonus) & performance based compensation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s