Movement through the Pay Range
Once the pay range is defined for each pay grade, criteria must be established to determine how placement and movement within the range will occur.
The 3 most common criteria are experience, seniority, and performance.
For example, a person’s initial placement in the pay range may be determined by previous experience. Seniority (in terms of years in the job) or performance (or both) can then be used to determine future increases within the pay range.
Just Noticeable Difference
A pay range may have as few as 3 or as many as 15 increments. Most have 6 or 7 increments. To be effective, a pay raise should constitute a “just noticeable difference.”
Just noticeable difference (JND) is the amount of pay increase necessary to be considered by employees receiving the increase.