Typical Salary Range Spreads

The Inverted Pyramid Concept

 Salary Formula 24A

According to the inverted pyramid concept:

  • Salary grades for early career professionals or lesser skilled jobs will generally be narrow.
  • As the salary grade increases, ranges get wider and allow for larger increases for jobs in these grades.
  • From a promotion perspective, vertical progression slows down since knowledge, skills, and abilities are more complex, and a longer time period is required to acquire or learn the associated competencies.

Source: How to Set Competitive Compensation Structures published by Economic Research Institute

Typical Range Spreads 

Mercer indicated that typical range spreads could be between 30% to 60%. Other sources indicated similar percentages. The range spreads differ with each organization. Where a broad banding system has been implemented, range spreads may be 100% or more.

Salary Formula 24B

Source: Hays Group

JOB LEVEL TYPICAL RANGE WIDTH
Lower-level service, production, and maintenance 20% to 25%
Clerical, technical, paraprofessional 30 to 40%
Higher-level professional, administrative, middle management 40 to 50%
Higher-level managerial, executive, technical 50% and above

Source: The WorldatWork Handbook of Compensation,Benefits and Total Rewards

JOB LEVEL TYPICAL RANGE WIDTH
Entry Level Jobs 30% to 40%
Professionals and Supervisory Staff 50% to 60%
Managers 60% to 75%
Senior Executives (Top Management) 75% to 100%

Source: Watson Wyatt

JOB LEVEL TYPICAL RANGE WIDTH
Non-Exempt 20% to 40%
Exempt/Professional 30% to 60%
Manager/Director 40% to 75%
VP/Executive 50% to 100%

Source: Center for Competitive Management

 

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