2. Introduction:
• Pay structures offer a framework for wage progression and can help encourage appropriate
behaviours and performance. Pay progression describes how employees are able to increase
their pay either within or outside a pay structure.
• This factsheet explores the purpose of pay structures and introduces the commonly used types.
It considers local pay structures, identifying the main approaches to regional pay differentiation.
It also examines the impact of pay structures on an employee’s ability to progress, as well as the
ways to determine pay progression.
3. What is Pay Structure:
• A pay structure is a collection of wage grades, levels or bands that link related jobs within a
hierarchy or series. It provides a framework to implement reward strategies and policies.
• They are usually designed to:
i. Align the reward strategy with the employer’s mission, vision, purpose and culture, and
business strategy by encouraging required behaviours and performance.
ii. Bring order and clarity in managing pay rises and career development.
iii. Help ensure fairness and lawfulness, for example by avoiding pay discrimination.
Why Pay Structure:
• Clarifies the market and internal value for each job and provides a way to manage employee pay
effectively.
• Quantifies
