Building a pay structure

If you have a lot of benchmark jobs, tabulate the average of all of the roles in the same internal level or grade. Obviously, the incumbent count of each grade will impact the overall costing model. It provides background thinking on what to do, for example when you are setting up in a new country, or if you want to create a salary structure in your current country, but in a totally different market.

The way it works is that your organization would join a community along with other organizations that use the same compensation data management platform.

Building Salary Ranges for Beginners, Part 1

We also regularly compare our crowd-sourced data to other sources to check for bias. Each situation is a red flag to HR that a formal compensation plan is needed. A leading source for salary information is PayScale, which gives you access to real-time data and surveys millions of respondents so the information itself is a highly accurate representation of the market.

As an HR Professional, it is your job to identify when a compensation plan is needed and, more importantly, to educate your leadership team that creating pay ranges is good for the business. The value of data sharing networks will vary depending on the size and make up of the participant list.

Your internal budget constraints, though, will dictate how close to this ideal you can achieve. These types of surveys are often very accurate. Develop appropriate communications for managers and staff.

Ten steps for building a salary structure

Does it make sense? In addition to the benefit of saving time, this data source provides coverage over many geographical locations Building a pay structure information that may be missing from certain traditional surveys. For professional roles specific to your sector, sector surveys could be a good source.

Strive to achieve a scale which will reflect your comp policy and enhance internal cohesion in the organization. See how close you can get to fully comparable to the market, and how much it will cost.

The truth is there is no one-size-fits-all range that will make sense for every business and in every market. With this option, the firm will survey competitors of your choice for their salary data and provide the aggregated results to you.

In other cases, and with multi-sector survey sources, look for those that utilize well-developed career ladders, enabling easy cross-occupational job matching. Most employers prefer at least two survey sources. Custom surveys are usually the most expensive market data option.

Each employer needs a policy which outlines their desired market position.Mar 06,  · A salary structure is commonly used by employers to set out the range of pay, from minimum to maximum, associated with each salary grade or band.

By associating each position with a grade or band, employers can use a salary structure to help manage compensation in an optimal way. Ten steps for building a salary structure. A salary structure is commonly used by employers to set out the range of pay, from minimum to maximum, associated with each salary grade or band.

If the organization encourages and values prudent risktaking Building Pay Structures FIGURE 2 Pay Structure Example Pay Grade General and Specific Factors Affecting Pay Structures Pay structures are influenced by the following general factors: • Corporate culture and values.

the pay line may be positioned to lead the market.5/5(1). o Why pay structure. o Requirements for building structure. o Building Structure. o Step 1: Identify multiple schedules. o Step 2: Determine pay grades. Why Pay Structure? The Process of establishing pay structure consists of five steps and it will also take care of external, internal and procedural equity.


Build a Pay Structure Pay structure is the strategic arrangement of pay levels in a hierarchy. These levels of responsibility, or grades, can be linked to the value of the position within the organization or through market pricing.

Building a pay structure
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