Components of a Salary Structure
Source: Center for Competitive Management
Key Considerations in Designing Salary Structure
There are certain key considerations in designing a salary structure:
- What are the jobs and salary levels that the salary the structure needs to cover?
- How many pay grades do you need or want to have?
- How much distance do you want between pay grades (midpoint progression)?
- How wide do you want your pay range to be (range spread)?
- How much overlap do you want between grades (range overlap)?
- How many structures do you need?
|Pay Group||Set of jobs related by market, practices & organization purpose.|
|Pay Grade||Jobs of similar value for example in terms of skill, effort and responsibility|
|Pay Range||Minimum to maximum pay limits|
|Midpoint||Controls movement through pay range|
Source: Tower Watson