In today’s changing workforce, having a clearly defined career path is becoming critical for attracting and retaining top talent. Setting pay ranges and grades can give you a competitive advantage in an ever-changing market by enabling clear job progression as well as competitive pay.
So how can you set your pay ranges just right?
In this webinar we show you how to build ranges from a market-centered midpoint, and how to use market data to update or create market-based pay ranges.
You’ll learn how to:
Build pay structures from the ground up
Choose benchmark positions and slot non-benchmark positions into your pay structure
Adjust and align your structure for special internal considerations
Create a strategy for dealing with “hot” jobs that fall outside of internal ranges
In this presentation, Mykkah Herner, a member of PayScale's compensation consulting team, will show you how to build ranges from a market-centered midpoint, and how to use market data to update or create market based pay ranges.
You’ll learn how to identify appropriate sources of market data, select an appropriate “market set” for utilizing market data, choose benchmark positions and slot non-benchmark positions into your pay structure, and create a strategy for dealing with “hot” jobs that fall outside of internal ranges.
4 Steps to Building a Smart Compensation StructurePayScale, Inc.
Developing a solid compensation structure will help you set the appropriate pay ranges for your jobs. If pay ranges are too narrow, you won’t be able to reward high performers. Too broad, and the pay ranges provide very little support for your compensation philosophy.
The document discusses building and maintaining a pay structure with grades and ranges. It provides guidance on key steps:
1) Identify multiple pay schedules to group labor markets and streamline the structure.
2) Determine pay grades by deciding the number of grades and job levels within each grade.
3) Develop pay ranges by setting the minimum, midpoint, and maximum for each grade using common differentials and spreads.
4) Assign positions to grades based on market pay and internal alignment. Maintain the structure by annually benchmarking grades and hot jobs against the market.
The document discusses job evaluation and salary structure design. It covers topics like job evaluation objectives, methods of job analysis, developing job descriptions, ensuring fairness in the rating process, analyzing market salary data, and designing a salary structure. The speaker aims to help organizations effectively administer compensation and attract talented employees.
In this webinar, MarketPay’s CEO Mark Avery will share how leading companies are using compensation survey data to develop competitive salary ranges for different types of salary structures. We will cover wide-accepted approaches to developing competitive pay ranges for traditional grade structures, and review a new technology-enabled methodology for large, international clients with global grading systems. Learn how organizations like yours can better leverage compensation survey libraries to ensure the competitiveness of your pay programs.
For more information on MarketPay, visit: http://www.marketpay.com/
The document discusses a company's "compa-ratio" system to determine employee pay rates and potential actions. The compa-ratio is an employee's actual pay divided by the midpoint of the pay range for their job grade. A ratio between 0-33% results in a demotion, 34-66% a lateral move, and 67-100% a promotion. The company monitors compa-ratios by performance ratings and functional areas to ensure pay aligns with performance and market rates for different roles.
A pay structure sets pay rates or ranges for jobs based on their internal value determined through job evaluation and external market rates. It aims to maintain competitive and equitable pay levels. A pay structure has elements like pay schedules, grades, and ranges. Designing a pay structure involves job analysis, evaluation, setting a pay policy, budgeting payroll, researching average salaries, and establishing a pay grade system to group positions by compensation level based on qualifications.
The document discusses job analysis which is the process of systematically understanding a job and presenting information about it. It involves gathering information about job duties through techniques like interviews and observation. This information is then analyzed and organized to develop job descriptions, specifications, and families. The key outputs of job analysis include templates that can be used for recruitment, training, performance management, and other human resource processes. The document outlines the typical steps in job analysis which include deciding how the information will be used, analyzing representative jobs, verifying the analysis, and developing descriptions and specifications.
In this presentation, Mykkah Herner, a member of PayScale's compensation consulting team, will show you how to build ranges from a market-centered midpoint, and how to use market data to update or create market based pay ranges.
You’ll learn how to identify appropriate sources of market data, select an appropriate “market set” for utilizing market data, choose benchmark positions and slot non-benchmark positions into your pay structure, and create a strategy for dealing with “hot” jobs that fall outside of internal ranges.
4 Steps to Building a Smart Compensation StructurePayScale, Inc.
Developing a solid compensation structure will help you set the appropriate pay ranges for your jobs. If pay ranges are too narrow, you won’t be able to reward high performers. Too broad, and the pay ranges provide very little support for your compensation philosophy.
The document discusses building and maintaining a pay structure with grades and ranges. It provides guidance on key steps:
1) Identify multiple pay schedules to group labor markets and streamline the structure.
2) Determine pay grades by deciding the number of grades and job levels within each grade.
3) Develop pay ranges by setting the minimum, midpoint, and maximum for each grade using common differentials and spreads.
4) Assign positions to grades based on market pay and internal alignment. Maintain the structure by annually benchmarking grades and hot jobs against the market.
The document discusses job evaluation and salary structure design. It covers topics like job evaluation objectives, methods of job analysis, developing job descriptions, ensuring fairness in the rating process, analyzing market salary data, and designing a salary structure. The speaker aims to help organizations effectively administer compensation and attract talented employees.
In this webinar, MarketPay’s CEO Mark Avery will share how leading companies are using compensation survey data to develop competitive salary ranges for different types of salary structures. We will cover wide-accepted approaches to developing competitive pay ranges for traditional grade structures, and review a new technology-enabled methodology for large, international clients with global grading systems. Learn how organizations like yours can better leverage compensation survey libraries to ensure the competitiveness of your pay programs.
For more information on MarketPay, visit: http://www.marketpay.com/
The document discusses a company's "compa-ratio" system to determine employee pay rates and potential actions. The compa-ratio is an employee's actual pay divided by the midpoint of the pay range for their job grade. A ratio between 0-33% results in a demotion, 34-66% a lateral move, and 67-100% a promotion. The company monitors compa-ratios by performance ratings and functional areas to ensure pay aligns with performance and market rates for different roles.
A pay structure sets pay rates or ranges for jobs based on their internal value determined through job evaluation and external market rates. It aims to maintain competitive and equitable pay levels. A pay structure has elements like pay schedules, grades, and ranges. Designing a pay structure involves job analysis, evaluation, setting a pay policy, budgeting payroll, researching average salaries, and establishing a pay grade system to group positions by compensation level based on qualifications.
The document discusses job analysis which is the process of systematically understanding a job and presenting information about it. It involves gathering information about job duties through techniques like interviews and observation. This information is then analyzed and organized to develop job descriptions, specifications, and families. The key outputs of job analysis include templates that can be used for recruitment, training, performance management, and other human resource processes. The document outlines the typical steps in job analysis which include deciding how the information will be used, analyzing representative jobs, verifying the analysis, and developing descriptions and specifications.
How to Build Pay Grades and Set Salary RangesShelley Reece
In today’s changing workforce, having a clearly defined career path is becoming critical for attracting and retaining top talent. Setting pay ranges and grades can give you a competitive advantage in an ever-changing market by enabling clear job progression as well as competitive pay. So how can you set your pay ranges just right?
Join PayScale’s compensation experts as they show you how to build ranges from a market-centered midpoint, and how to use market data to update or create market-based pay ranges.
Recording: https://www.humanresourcestoday.com/webinar-series/how-to-build-pay-grades-and-set-salary-ranges/
The document discusses different types of pay structures used by organizations, including:
1) Narrow-graded structures which have defined pay grades with small ranges and provide scope for progression.
2) Broadbanded structures which reduce the number of grades into wider bands for more flexibility.
3) Career family and job family structures which group jobs by common functions or processes into levels with consistent pay ranges.
4) Pay spines used in public sector with incremental pay points and grades attached. The document compares advantages and disadvantages of different structures.
Grade and pay structure - compensation management - Manu Melwin Joymanumelwin
This document discusses various types of grade and pay structures used in compensation management. It defines grade structures as hierarchies that group similar jobs and pay structures as attaching pay ranges or scales to grades. Narrow structures have many grades while broad structures have fewer broader grades. Career family structures group jobs by function into families with levels defined by responsibilities. Broad banding reduces grades for more flexible pay. Pay spines show incremental pay points. Performance-linked compensation ties pay to goals. Incentives like bonuses motivate higher performance.
This document discusses how to conduct and interpret wage surveys. It explains that wage surveys are used to adjust pay levels based on competitors, set pay mixes, establish pay structures, and analyze pay problems. When designing a survey, relevant market competitors are selected based on occupations, skills, geographic area, or products/services. Surveys collect data on organizations, compensation systems, and pay for specific jobs. Results are interpreted by verifying data, checking for anomalies, and conducting statistical analysis. A market pay line is constructed to combine the internal pay structure with external market rates.
This document discusses wage and salary administration. It explains that job evaluation is the cornerstone of a formal wage and salary program as it determines internal pay relationships and helps companies achieve their pay policies. Job evaluation also provides a foundation for incentive plans, personal moves, controlling costs, and setting pay scales relative to competitors. An effective wage and salary program requires identifying needs, objectives, developing programs, and executing programs. Responsibilities are divided between wage and salary staff, line managers, and top executives.
Redesigning the Role of Talent Acquisition From Transactional to StrategicGlassdoor
The document discusses transforming a talent acquisition team from transactional to strategic. A transactional team focuses on quickly filling roles and administrative tasks, but lacks understanding of business needs. A strategic team understands workforce planning, seeks to improve quality of hire through networking and data analysis, and acts as an advisor to influence hiring decisions. The document outlines steps to make this transition, such as building support, training the team, and investing in tools that support strategic talent acquisition goals.
Job evaluation is a systematic process to determine the relative worth of jobs in an organization. It involves analyzing jobs, not individuals, and establishing a rational pay structure. The key steps are gaining acceptance, creating an evaluation committee, analyzing jobs, selecting an evaluation method, classifying jobs, installing the program, and periodic reviews. Common methods include ranking, classification, factor comparison, and point methods. While complex, the point method considers multiple compensable factors to determine appropriate pay levels.
Job evaluation is a process to determine the importance and complexity of jobs in an organization. It is crucial for creating equitable pay structures and attraction/retention of top talent. There are several common job evaluation methods: ranking method ranks jobs based on value to the organization; classification method groups similar jobs into classes/grades; point method assigns points to compensable factors like skills, responsibility and conditions; and factor comparison method evaluates jobs based on compensable factors without weights. Each method has advantages like objectivity, but also limitations such as subjectivity.
The document discusses building an integrated talent acquisition strategy and its key components. It outlines 9 components: staffing function, workforce planning, employer branding, recruitment and selection, onboarding and new employee experience, HR processes, HR partners, compensation, and training and development. Each component is then further described in more detail.
This document discusses compensation strategies in India. It outlines three main models of compensation strategy: position based, person based, and performance based. For each model, it describes the key aspects, benefits, and pitfalls. It also discusses compensation practices that are common in India, such as maintaining a lower cost of labor compared to other countries and offering double digit salary increases. The conclusion recommends that a performance based model is best for motivating employees and controlling work activities.
1. The document discusses skill-based pay, which links pay increases to the skills an employee acquires rather than their job. It provides advantages like increased flexibility, productivity, and quality. Skill-based pay requires analyzing skill requirements, setting up training modules, and properly administering certification of skills and payment. Industries where skills are important and labor costs are low are most appropriate for skill-based pay.
Job analysis is the systematic process of collecting information about jobs within an organization. It involves determining the tasks, duties, responsibilities, and skills required for each job. There are several methods for conducting job analysis, including interviews, questionnaires, observation, diaries/logs, and technical conferences. The key outcomes of job analysis are job descriptions, job specifications, and job evaluations. Job analysis provides important information for human resource functions like recruitment, selection, performance management, training, development, and compensation.
This document discusses different concepts and methods related to job evaluation. It covers the following key points in 3 sentences:
Job evaluation involves systematically evaluating jobs within an organization based on factors like skills, effort, responsibility, and working conditions to determine their relative worth and establish a pay structure. Common methods of job evaluation include ranking, classification, factor comparison, and point methods which break jobs down and compare them based on compensable factors. The goal of job evaluation is to establish equity and fairness in compensation by objectively assessing the value of different jobs within an organization.
The document provides an overview of job evaluation processes and systems through a comparative study. It describes job evaluation as systematically determining the relative worth of jobs in an organization. The key purposes are to establish a rational pay structure and achieve equitable distribution of wages. Several common job evaluation methods are examined, including Paterson, Hay, Peromnes, and Castellion systems. Each method evaluates jobs based on different compensable factors like decision-making, skills, knowledge, responsibilities. The document also compares the strengths and weaknesses of different approaches and provides examples of how job grades correspond across evaluation systems.
This document discusses mentoring, coaching, and performance management. It defines mentoring as a one-to-one relationship between an experienced and inexperienced person. Coaching is described as equipping individuals with tools and opportunities to develop themselves. The document outlines the mentoring process, characteristics of mentors, benefits of mentoring, and limitations. It also discusses the coaching process, skills needed for coaching, and barriers to effective coaching. The overall purpose is to provide guidance on mentoring, coaching, and performance management systems.
Talent Acquisition in Human Resource Management Practices Shranik Jain
This document summarizes and compares the talent acquisition strategies of three companies - Yamaha India, Newgen Software, and ANA Design Studio. It outlines their approaches to recruitment, performance evaluation, and appraisals. It also discusses best practices in the manufacturing industry for talent acquisition and some unconventional hiring practices of companies like Google, Amazon and Facebook. The conclusion emphasizes that effective talent acquisition lies in determining who to recruit, crafting the right recruitment message, and how to reach target candidates in order to improve hiring quality and employee performance.
This document discusses employee retention in organizations. It defines employee retention as measures taken to encourage employees to remain with an organization for as long as possible. Retaining key employees is important for long-term organizational success as it ensures customer satisfaction, productivity, and preservation of institutional knowledge. The document outlines some of the challenges of employee retention, such as the costs of replacing employees and the competitive job market. It stresses the importance of identifying employees' needs and developing tailored retention strategies to keep talented workers.
The document discusses best practices for recruiting metrics at CUNA Mutual Group. It proposes several metrics to measure recruiting performance, including Need Date (measures filling positions on time), Recruiting Cost Ratio (measures hiring efficiency), and Source Yield Ratio (measures quality of applicants from different sources). It also discusses surveys to measure Quality of Hire from the perspectives of new hires, hiring managers, and recruiters. The document advocates using a dashboard to view metrics over time and identify trends to improve recruiting.
Compensation Foundations Webinar: Pay RangesPayScale, Inc.
The document discusses compensation structures and pay ranges. It defines key terms like pay grades and pay ranges. Pay grades group multiple jobs and identify the associated pay range. Pay ranges specify a minimum, midpoint and maximum pay level. The document outlines the benefits of having a structured compensation system, such as alignment, fairness, communication and confidence. It also discusses approaches to building compensation structures, including developing pay grades and ranges based on market data and internal alignment. Maintaining the structure involves benchmarking new positions, evaluating ranges annually, and reassigning grades as needed.
Webinar-Comp Foundations-Overpayment/UnderpaymentPayScale, Inc.
Just discovered that a large portion of your workforce is overpaid or underpaid? Not sure what to do?
Join us for a walkthrough on how to discover and manage over/underpayment.
This webinar covers:
- What to do with a new minimum wage
- Payment relative to market
- Employees who are paid out of range
- Communicating pay adjustments
- To freeze or not to freeze pay?
How to Build Pay Grades and Set Salary RangesShelley Reece
In today’s changing workforce, having a clearly defined career path is becoming critical for attracting and retaining top talent. Setting pay ranges and grades can give you a competitive advantage in an ever-changing market by enabling clear job progression as well as competitive pay. So how can you set your pay ranges just right?
Join PayScale’s compensation experts as they show you how to build ranges from a market-centered midpoint, and how to use market data to update or create market-based pay ranges.
Recording: https://www.humanresourcestoday.com/webinar-series/how-to-build-pay-grades-and-set-salary-ranges/
The document discusses different types of pay structures used by organizations, including:
1) Narrow-graded structures which have defined pay grades with small ranges and provide scope for progression.
2) Broadbanded structures which reduce the number of grades into wider bands for more flexibility.
3) Career family and job family structures which group jobs by common functions or processes into levels with consistent pay ranges.
4) Pay spines used in public sector with incremental pay points and grades attached. The document compares advantages and disadvantages of different structures.
Grade and pay structure - compensation management - Manu Melwin Joymanumelwin
This document discusses various types of grade and pay structures used in compensation management. It defines grade structures as hierarchies that group similar jobs and pay structures as attaching pay ranges or scales to grades. Narrow structures have many grades while broad structures have fewer broader grades. Career family structures group jobs by function into families with levels defined by responsibilities. Broad banding reduces grades for more flexible pay. Pay spines show incremental pay points. Performance-linked compensation ties pay to goals. Incentives like bonuses motivate higher performance.
This document discusses how to conduct and interpret wage surveys. It explains that wage surveys are used to adjust pay levels based on competitors, set pay mixes, establish pay structures, and analyze pay problems. When designing a survey, relevant market competitors are selected based on occupations, skills, geographic area, or products/services. Surveys collect data on organizations, compensation systems, and pay for specific jobs. Results are interpreted by verifying data, checking for anomalies, and conducting statistical analysis. A market pay line is constructed to combine the internal pay structure with external market rates.
This document discusses wage and salary administration. It explains that job evaluation is the cornerstone of a formal wage and salary program as it determines internal pay relationships and helps companies achieve their pay policies. Job evaluation also provides a foundation for incentive plans, personal moves, controlling costs, and setting pay scales relative to competitors. An effective wage and salary program requires identifying needs, objectives, developing programs, and executing programs. Responsibilities are divided between wage and salary staff, line managers, and top executives.
Redesigning the Role of Talent Acquisition From Transactional to StrategicGlassdoor
The document discusses transforming a talent acquisition team from transactional to strategic. A transactional team focuses on quickly filling roles and administrative tasks, but lacks understanding of business needs. A strategic team understands workforce planning, seeks to improve quality of hire through networking and data analysis, and acts as an advisor to influence hiring decisions. The document outlines steps to make this transition, such as building support, training the team, and investing in tools that support strategic talent acquisition goals.
Job evaluation is a systematic process to determine the relative worth of jobs in an organization. It involves analyzing jobs, not individuals, and establishing a rational pay structure. The key steps are gaining acceptance, creating an evaluation committee, analyzing jobs, selecting an evaluation method, classifying jobs, installing the program, and periodic reviews. Common methods include ranking, classification, factor comparison, and point methods. While complex, the point method considers multiple compensable factors to determine appropriate pay levels.
Job evaluation is a process to determine the importance and complexity of jobs in an organization. It is crucial for creating equitable pay structures and attraction/retention of top talent. There are several common job evaluation methods: ranking method ranks jobs based on value to the organization; classification method groups similar jobs into classes/grades; point method assigns points to compensable factors like skills, responsibility and conditions; and factor comparison method evaluates jobs based on compensable factors without weights. Each method has advantages like objectivity, but also limitations such as subjectivity.
The document discusses building an integrated talent acquisition strategy and its key components. It outlines 9 components: staffing function, workforce planning, employer branding, recruitment and selection, onboarding and new employee experience, HR processes, HR partners, compensation, and training and development. Each component is then further described in more detail.
This document discusses compensation strategies in India. It outlines three main models of compensation strategy: position based, person based, and performance based. For each model, it describes the key aspects, benefits, and pitfalls. It also discusses compensation practices that are common in India, such as maintaining a lower cost of labor compared to other countries and offering double digit salary increases. The conclusion recommends that a performance based model is best for motivating employees and controlling work activities.
1. The document discusses skill-based pay, which links pay increases to the skills an employee acquires rather than their job. It provides advantages like increased flexibility, productivity, and quality. Skill-based pay requires analyzing skill requirements, setting up training modules, and properly administering certification of skills and payment. Industries where skills are important and labor costs are low are most appropriate for skill-based pay.
Job analysis is the systematic process of collecting information about jobs within an organization. It involves determining the tasks, duties, responsibilities, and skills required for each job. There are several methods for conducting job analysis, including interviews, questionnaires, observation, diaries/logs, and technical conferences. The key outcomes of job analysis are job descriptions, job specifications, and job evaluations. Job analysis provides important information for human resource functions like recruitment, selection, performance management, training, development, and compensation.
This document discusses different concepts and methods related to job evaluation. It covers the following key points in 3 sentences:
Job evaluation involves systematically evaluating jobs within an organization based on factors like skills, effort, responsibility, and working conditions to determine their relative worth and establish a pay structure. Common methods of job evaluation include ranking, classification, factor comparison, and point methods which break jobs down and compare them based on compensable factors. The goal of job evaluation is to establish equity and fairness in compensation by objectively assessing the value of different jobs within an organization.
The document provides an overview of job evaluation processes and systems through a comparative study. It describes job evaluation as systematically determining the relative worth of jobs in an organization. The key purposes are to establish a rational pay structure and achieve equitable distribution of wages. Several common job evaluation methods are examined, including Paterson, Hay, Peromnes, and Castellion systems. Each method evaluates jobs based on different compensable factors like decision-making, skills, knowledge, responsibilities. The document also compares the strengths and weaknesses of different approaches and provides examples of how job grades correspond across evaluation systems.
This document discusses mentoring, coaching, and performance management. It defines mentoring as a one-to-one relationship between an experienced and inexperienced person. Coaching is described as equipping individuals with tools and opportunities to develop themselves. The document outlines the mentoring process, characteristics of mentors, benefits of mentoring, and limitations. It also discusses the coaching process, skills needed for coaching, and barriers to effective coaching. The overall purpose is to provide guidance on mentoring, coaching, and performance management systems.
Talent Acquisition in Human Resource Management Practices Shranik Jain
This document summarizes and compares the talent acquisition strategies of three companies - Yamaha India, Newgen Software, and ANA Design Studio. It outlines their approaches to recruitment, performance evaluation, and appraisals. It also discusses best practices in the manufacturing industry for talent acquisition and some unconventional hiring practices of companies like Google, Amazon and Facebook. The conclusion emphasizes that effective talent acquisition lies in determining who to recruit, crafting the right recruitment message, and how to reach target candidates in order to improve hiring quality and employee performance.
This document discusses employee retention in organizations. It defines employee retention as measures taken to encourage employees to remain with an organization for as long as possible. Retaining key employees is important for long-term organizational success as it ensures customer satisfaction, productivity, and preservation of institutional knowledge. The document outlines some of the challenges of employee retention, such as the costs of replacing employees and the competitive job market. It stresses the importance of identifying employees' needs and developing tailored retention strategies to keep talented workers.
The document discusses best practices for recruiting metrics at CUNA Mutual Group. It proposes several metrics to measure recruiting performance, including Need Date (measures filling positions on time), Recruiting Cost Ratio (measures hiring efficiency), and Source Yield Ratio (measures quality of applicants from different sources). It also discusses surveys to measure Quality of Hire from the perspectives of new hires, hiring managers, and recruiters. The document advocates using a dashboard to view metrics over time and identify trends to improve recruiting.
Compensation Foundations Webinar: Pay RangesPayScale, Inc.
The document discusses compensation structures and pay ranges. It defines key terms like pay grades and pay ranges. Pay grades group multiple jobs and identify the associated pay range. Pay ranges specify a minimum, midpoint and maximum pay level. The document outlines the benefits of having a structured compensation system, such as alignment, fairness, communication and confidence. It also discusses approaches to building compensation structures, including developing pay grades and ranges based on market data and internal alignment. Maintaining the structure involves benchmarking new positions, evaluating ranges annually, and reassigning grades as needed.
Webinar-Comp Foundations-Overpayment/UnderpaymentPayScale, Inc.
Just discovered that a large portion of your workforce is overpaid or underpaid? Not sure what to do?
Join us for a walkthrough on how to discover and manage over/underpayment.
This webinar covers:
- What to do with a new minimum wage
- Payment relative to market
- Employees who are paid out of range
- Communicating pay adjustments
- To freeze or not to freeze pay?
Getting started in Comp can feel overwhelming, but it doesn’t have to be.
We all want to compare our workforce to market. But how do you outline your workforce and define which market you’re competing in? This webinar will walk you through the basic concepts of compensation and explain how they relate to your real-world challenges. You’ll learn more about the choices that you can make to evaluate your workforce.
Comp 101 covers:
-How jobs are benchmarked
-When to use different Labor Markets for different roles
-Best practices for outlining your Labor Market
-Understanding Market Data
-How paying at the 10th/50th/90th percentiles impacts your strategy
-Live Question & Answer segment
Budgeting Part: Putting it All Together With PayScale Insight SlidesPayScale, Inc.
In the final installment of the Compensation Budgeting webinar series you will learn about the software and data you need to formalize your compensation strategy.
Now that Spring is here it’s a great time to review your comp plan. Whether you are updating an existing plan or have something more informal in place, this will be an excellent webinar to attend.
We’ll walk you through some basics such as evaluating your compensation philosophy and strategy, keeping up on critical jobs in the market, and ensuring basic compliance.
Structure can be a good thing. Pay ranges give you guidelines for how to pay your people, and help you to identify pay inconsistencies and inequities across your employees. Join this webinar to learn more.
-An overview of how to use your Insight Platform to build out a range structure
-Best Practices of what to think about when building out a structure in the tool for the first time
-Keys tips to implement pay ranges in your organization
The Pitfalls of Linking Pay With Performance and How To Overcome ThemCBIZ, Inc.
Linking pay with performance can be beneficial for your company, but it could also have dire implications if done improperly. Read on as Ed Rataj explains what could go wrong, and how to overcome the pitfalls of linking pay with performance.
The document provides guidance on building an effective compensation plan. It discusses establishing job descriptions, benchmarking salary ranges using market data, developing performance management systems, and creating guidelines for administering pay increases. The compensation plan aims to attract, motivate, and retain talent by linking pay to performance and career progression.
Are you looking for a tried and true methodology for designing or updating your compensation plans? Join us for an exclusive presentation with global compensation consultant John Rubino who will present a successful approach for developing an effective and competitive base salary program.
In this webinar you will learn how leading global organizations are designing compensation plans to better utilize available budgets with a more strategic and streamlined approach. All of the necessary components will be discussed, including:
· Effective & compliant job descriptions that actually work;
· The best approaches and compensation metrics for analyzing pay & making decisions
· Quantitative tools for creating a competitive base salary structure;
· Incentive pay plan essentials - designing plans that drive productivity & retention
· Variable pay: how it works and are you ready for it.
Compensation Budgeting Part 2: Determining RaisesPayScale, Inc.
This document provides information on determining raises as part of a three-part compensation budgeting series. It discusses rewarding employees based on market, performance, tenure, or other factors. Methods for calculating raises include paying to market using tiered increases based on salary range penetration and performance matrices. The document provides templates for calculating market-based and performance-based raises. It stresses developing comprehensive budget recommendations by considering solutions to organizational, position, and individual pay inequities identified previously and factoring in the cost of annual pay increases.
12 20 22-Recorded Webinar-Maximizing MarketPay-Structures-Job-Based-Ranges.pdfPayScale, Inc.
Join Payscale’s MarketPay Product Manager and Education team for a group discussion and training that covers roadmap, best practices, and how to implement range-based structures amidst the current pay legislation landscape.
Webinar-Comp Foundations-Be an Analytics HeroPayScale, Inc.
You have a comp issue to address. And you have access to many reports through PayScale Insight’s Analytics Launchpad. Which one will give you the answer you need?
This webinar will show you how to use PayScale reporting and analytics to back up comp decisions. You’ll look like an analytics super hero without having to get a degree in data science.
The document discusses labor management strategies for the 21st century. It outlines how labor is a major cost for many companies and labor management can help reduce costs through improved productivity and employee retention. Modern labor management involves setting engineered performance standards, measuring employee performance, and providing incentives like bonuses to motivate employees and reward high performance. Regular feedback is important and technology allows for near real-time tracking of performance. Case studies show how various companies achieved productivity gains and cost savings through implementing labor management programs.
Workforce Plus: Tips and Tricks to Give Workforce an Extra Kick! Alithya
This document provides tips and tricks for configuring the Oracle Workforce module. It discusses dimensionality considerations when building a workforce application and outlines the different planning granularity options. It also covers scenario handling, compensation calculations including base salary, additional earnings, benefits and taxes. Configuration of components, options, and tiers is explained. Custom dimensions, calculations, and expense logic are discussed. Effective use of out-of-the-box functionality versus custom configurations is recommended.
Webinar-5 Steps to Building a Modern Comp PlanPayScale, Inc.
A comprehensive compensation plan can guide your organization in its talent strategies, but a modern comp plan drives organizational success. Modern compensation planning is rooted in your company’s goals and uses pay as a lever to increase employee retention, engagement, and performance. Whether you’re creating a modern compensation plan for the first time or updating an existing one, these five steps will help you create a plan that sets your organization up for long-term success.
Join PayScale’s Krystal Praast and Diane Schuman to learn how to create a modern comp plan from intention to implementation.
Register for this webinar and you’ll learn about:
-The importance of laying the groundwork for comp success
-How to build market-based pay ranges
-The path to successfully implementing your plan
It's time to start thinking about your 2017 compensation budget. Getting pay right is critical to keeping, attracting, and motivating your best people, but how can you make compensation a priority for next year’s budget? Join PayScale as we discuss:
-Checking for market movement
-Identifying and resolving pay inequities
-Selling the need for a decent compensation budget
Budgeting Part 1: Managing Internal Pay InequitiesPayScale, Inc.
It’s budget season again, and that makes it time to update your data for next years comp plan. The first critical step is to get a sense of where the issues are.
This document discusses how to create a market-competitive pay plan. It outlines a 5-step process for establishing pay rates: 1) conducting a salary survey, 2) evaluating jobs, 3) grouping similar jobs into pay grades, 4) pricing each pay grade, and 5) fine-tuning pay rates. It also covers topics like competency-based pay, executive compensation, the gender pay gap, and using HRIS systems to automate compensation administration. The overall goal is to develop a pay structure that attracts and retains employees while remaining fiscally responsible.
This document provides tips for recruiting top talent in a highly competitive talent market. It discusses determining an appropriate hiring range based on market data and the job requirements. The hiring range should be a subset of the full pay range for the role. When making an offer, consider both the candidate's skills and experience as well as where their pay would fall within the existing range. It's important to communicate the full offer, including compensation, benefits, culture and opportunities when recruiting candidates.
Similar to How to Build Pay Grades and Set Salary Ranges (20)
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Join Payscale’s Chief Product Evangelist, Ruth Thomas; Director of Product Management - Data Products, Vicky Peakman; and Director of Data Science, Sara Hillenmeyer as they explore the intricacies of how to design and implement your compensation data strategy.
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Let us show you how Payscale Compensation Planning allows you to streamline collaboration, improve workflows, maximize salary budget, and manage pay equity in the pay increase process. It’s never been easier to bring people and technology together to equitably and efficiently reward employee performance.
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3. www.payscale.com
Agenda
Why have a Pay Structure
Building Structure
• Step 1: Identify pay schedules
• Step 2: Determine pay grades
• Step 3: Develop ranges
• Step 4: Assign grades to positions & adjust for internal equity
Using Pay Ranges
Deviating from the Structure
Immediate Actions
www.payscale.com
4. Why have pay structure
• Clarifies the market and internal value for each job, and provides
a way to manage employee pay effectively
• Quantifies compensation costs & enables budget decisions
• Validates compensation strategy & aligns to business goals
• Provides a tool to talk with employees about development
• Ensures pay equity
• Determines pay for non-benchmark jobs
• Allows ease of administration
www.payscale.com
5. Why not?
• Small number of jobs
• Quick-moving jobs
• Typical organization
• Just the facts!
www.payscale.com
9. Identify Pay Schedules
Ensures competitive pay to local
market and internal alignment
Consider Organizational Complexity
• Industries and/or Lines of Business
• Job Functions
• Locations
www.payscale.com
10. 6 Different Pay Schedules:
o Home Schedule– 3 labor markets, within 2.5% of HQ
o Schedule A, Minus 15% Schedule – 4 labor markets
o Schedule B, Minus 10% Schedule – 7 labor markets
o Schedule C, Minus 5% Schedule – 4 labor markets
o Schedule D, Plus 5% Schedule – open
o Schedule E, Plus 10% Schedule – 1 labor market
For example…
12. Determine Pay Grades
Number of pay grades varies in
response to:
• Size of the organization
• Distance between the highest and
lowest level job
• How differentiated the jobs are (i.e.
levels)
• The pay increase and promotion policy
of the organization
Determine the definition or label for
each grade
www.payscale.com
16. Building Structure
Step 4: Assign grades to positions
and adjust for internal alignment
www.payscale.com
17. Align positions to structure by matching
market value with closest range midpoint
Assign Grades to Positions
www.payscale.com
18. Adjust for Internal Alignment
•Positions with similar level of responsibility and value
to the organization
•Where market data is between two grades, use
internal equity to tip
www.payscale.com
20. How do you use
pay ranges?
• Understand employee
placement in range
• Develop guidelines or policies
• Develop processes
• Train your managers
www.payscale.com
21. Understanding Range
Penetration (RP)
RP = (EE Pay – Range Min) / (Range Max - Range
Min)
• Indicator of how employee is positioned in
the range
• Use RP in policies to get specific
www.payscale.com
22. Employee Placement in Range
Range MidpointMinimum Maximum
$20,000 $32,000
$26,000
Range Midpoint:Range Minimum: Range Maximum:
Lower limit of a pay
range/band. Pay for
new or less experienced
employees should be
closer to minimum.
The midpoint identifies the
proficiency point. Market
based ranges have a
midpoint that aligns with the
target percentile in the
market.
The upper limit of a pay
range/band. Pay for more
tenured employees or star
performers should be
approaching this number.
www.payscale.com
23. Employee Placement in Range
Range MidpointMinimum Maximum
$20,000 $32,000
$26,000
Green-Circled Employees Red-Circled Employees
Employees that are paid
below the minimum of
the pay range.
Employees that are paid
above the maximum of
the pay range.
www.payscale.com
24. Comparing Employee Pay
to Ranges
Range MidpointMinimum Maximum
$20,000 $32,000
$26,000
50% Penetration
33% 66% 100%0%
Range Penetration:
A percentage that shows an
employee’s position in the range. The
percentage shows a relative
comparison to the minimum of the
range.
= (Employee Pay – Min) / (Max – Min)
Range Penetration = 0%
Employee’s pay is at the minimum
Range Penetration = 50%
Employee’s pay is at the midpoint
Range Penetration =100%
Employee’s pay is at the maximum
www.payscale.com
26. Why?
• Paying above and below
ranges
• For hot jobs
• For differentials or temporary
responsibilities
www.payscale.com
27. How?
• Pay to market, +/- by experience or performance
• Set the range, but adjust ranges quarterly (up and
down)
• Pay a market premium over the existing range
within structure
• Pay a differential on top of the base pay - can
easily be removed if the conditions change
www.payscale.com
28. Immediate Actions
Gather information about your jobs
Talk with managers and executives
Obtain accurate market data for your positions
Identify unique organizational situations
Determine organization capacity for building
structure
www.payscale.com
29. PayScale Delivers Where Other Compensation Providers Fall Short
PayScale leads the world in compensation knowledge with the freshest and
most detailed data from over 40 million salary profiles. More than 3000
organizations use PayScale’s software and intelligence to get the greatest
return on their talent. Smart businesses use PayScale Insight to recruit, retain
and motivate their people.
Visit our blog: www.payscale.com/compensation-today
Join our Group on LinkedIn: Compensation Today: HR Best Practices
Jennifer Ferris, CCP
Sr. Compensation Professional
Paige Hanley, CCP
Sr. Compensation Professional
www.payscale.com
Editor's Notes
Hedge
Manage polls
Type all the stuffs in
“create”
Then it’ll be there when you want it…
Launch
Show/Share
Hide
Quiz for the end:
What are your biggest challenges in developing a pay structure?
We lack a compensation philosophy or strategy
We lack market data for our jobs
I’m still unclear about the purpose of a structure
I need help building a pay structure
Something else
Hedge
Creator of the largest database of individual compensation profiles in the world, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software.
PayScale’s products are powered by innovative search and query algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time.
Publisher of the quarterly PayScale IndexTM, PayScale's subscription software products for employers include PayScale MarketRateTM and PayScale InsightTM. Among PayScale's 2,500 corporate customers are organizations small and large across industries including Mozilla, Tully’s Coffee, Clemson University and the United States Postal Service.
Jen
Let’s take a look at our agenda. First we’ll discuss when and why a structure might be useful, and then we’ll talk about some cases where maybe you don’t need one.
Following that, we’ll focus quite a bit of our time on the four steps needed to Build Structure
Step 1: Identify pay schedules (PAIGE)
Step 2: Determine pay grades (JEN)
Step 3: Develop ranges (PAIGE)
Step 4: Assign grades to positions & adjust for internal equity (JEN)
Then, we’ll provide some guidance around using Pay Ranges (PAIGE)
We’ll talk about some cases when you might need to deviate from the structure, and how to go about that (JEN).
And finally, we’ll give you some Immediate Actions for moving forward. (PAIGE)
PAIGE
Differentiate between org structure and pay structure. An org structure might be something like entry-level, individual contributor, managerial level, executive level vs. a pay structure – often this will align with an org structure, but it is more differentiated and articulated – more specific and detailed.
Clarifies market competitiveness and insures equal weight between this and internal alignment of jobs. Managing pay is effective and efficient.
Pushes organizations to quantify pay, thus enabling better budgeting decisions
Is determined based on a compensation strategy that aligns with organization goals – therefore ensuring this is validated over time
Gives execs and managers confidence and tools to talk with employees about pay and their career opportunities within the organization
Ensures pay equity
Provides a structure for pay to help align non-benchmark jobs
Non-benchmark jobs being jobs that are not as common in the general marketplace
In the end, allows for compensation to be much easier to administer and manage ongoing
NEXT, I’ll turn it over to Jen to talk through what you’ll need to get started with building a pay structure.
Paige
-small org – has to do with number of jobs. If your structure has one job per grade, probably unnecessary, and isn’t adding to simplicity
-high # of jobs moving quickly – software developers for example. If your org is primarily SDs, maybe you just want ranges for that job, or maybe you are okay with just looking at the market. Or, if you are a consulting org – 80% of your workforce is different levels of consultants, maybe you don’t need to include those jobs in your structure, or maybe you don’t need one at all.
-market data for most jobs – maybe that will do it for you. If you are a very typical org where your positions mirror exactly benchmark positions in the market (we don’t hear this a lot!!), you might not need a structure – the point of a structure is to help fit in jobs that aren’t necessarily typical
-facts – ex: engineering org for example, or scientists, they don’t always want or buy into ranges because they want to see the actual market data – the scientific proof – about pay. Ranges take into account art and science – they don’t want anything subjective! Market data only please!
Jen
So what are some requirements for building a pay structure?
First – a compensation Philosophy & Strategy
Philosophy – this is a high-level view on the aims of the organization with regards to compensation
The Strategy is how you operationalize your philosophy – your strategy digs in a little further and puts some definition around those high level goals of your philosophy. For example,
You’ll want to define your talent market or markets;
Determine your level of competitiveness within those markets; and
Address what it is that you want to reward as an organization
Another foundational element needed before building a pay structure is knowledge around your jobs. If you are building a market-based structure (which we of course recommend), you’ll need to know some information about each of your positions in order to benchmark them appropriately in the market.
And to that point – a market analysis is the final requirement for building a market-based pay structure. This analysis is needed to determine the value of your jobs in your various talent markets.
Org priorities – are you trying to grow, do more with less, what are your key functions that really drive the org forward. Ultimately you should be creating a structure that drives your organizational objectives.
Jen
So let’s talk for a minute about some of the elements of a pay structure. My purpose isn’t to go too much into depth on this slide, as we’ll dig into each of these pieces further in a moment.
The first thing we want to touch on are pay schedules.
What are pay schedules?
Pay Schedules are
Sets of Pay Grades, typically grouped by things like geography or industry, that are used to preserve competitive pay to both the market and internal alignment. They reflect the cost of labor in their respective market.
Next we have pay grades.
A Pay Grade
Is a label for a group of jobs with similar relative internal worth. And,
A pay grade is associated with a pay range.
Pay Ranges
A lower and upper limit associated with a pay grade.
Generally has a minimum, midpoint, and maximum.
Paige will talk a little more later about how to use pay ranges more in depth.
PAIGE
The first step to take in building a pay structure is to identify if you need pay schedules and how many may be necessary
What are pay schedules and why might you need them?
As a reminder, a pay schedule is a set of grades and ranges grouped by things like geography or industry – they are used to ensure competitive pay to local market and internal alignment.
Main things to consider to determine whether or not schedules are appropriate for your organization:
Industries or lines of business:
Retail & Social Services
Sales
Engineers vs Admin
Faculty vs. staff
Job Functions
Some jobs just go on their own structure – consultant, software developer, engineers
Locations
Seattle vs. Dallas, TX
Example: one client had office positions and labor positions paid similarly. They wanted to be relatively transparent with their pay structure – ie let EEs know their grade. They didn’t think the Office workers would like to know they were in the same pay grade as the labor workers, so they developed one schedule for the office and one for the labor folks, using the same set of pay ranges.
Paige
This shows a sample of pay schedules set based on geographic differences in pay.
Illustrates the streamlining of the structure, as it groups 19 different markets into 6 pay schedules based on similar paying geographies.
So that summarizes the first step in the process - how to identify pay schedules.
NEXT, Jen will talk through the 2nd step – determining pay grades
Jen
The next step in our process is to determine the appropriate number of pay grades for your organization. One thing to note as we’re talking about this; there are no fixed rules that apply to every organization. There is not a “right” way or a “wrong” way to determine your pay grades. The way you choose to organize your structure is very dependent upon the individual needs of your organization.
The first thing you’ll want to do is figure out how many grades makes sense to have for your organization. The number of pay grades varies in response to things like:
The size of the organization;
The vertical distance between the highest and lowest-level job in your organization;
How finely the organization defines jobs and differentiates between them (i.e. levels); and
The pay increase and promotion policies of the organization.
The next thing you’ll want to do is determine the definition of each grade.
Do you want to use numbers? Do you want to use letters? Do you want numbers for your salaried structure and letters for your hourly structure?
Where do you want to start your numbering? Maybe you want to have your lowest grade start at 11, and move up from there.
I once worked with an organization that did not want to use the letter “F” in their structure, because of the connotation associated. So, we ended up starting their structure at G to avoid it altogether.
Once you have these questions answered, you’ll want to move forward to developing ranges, which Paige will cover next.
PAIGE
The third step is where you begin seeing some of the end results. This is the fun part! – pay ranges for the grades and pay schedules you’ve determined
Paige to talk through these items:
This is the technical part – we’ve included all the formulas here. But – if you are using our system it will do the math for you.
PAIGE – DO SOME OF THESE CALCULATIONS BEFORE THE CALL SO YOU CAN SPEAK TO WHAT THE MID DIFF IS (FOR EXAMPLE) IN THIS STRUCTURE
Midpoint Differential. ~15% for this example
Distance between midpoints
=(MidB-MidA)/MidA
Range Spread. Starts at ~30% goes to ~44% for this example
Distance between bottom and top of range
=(Max-Min)/Min
Typical range spreads are 30% to 60%
Min relative to Mid.
=Mid/(1+(Range Spread/2))
Max relative to Min.
=Min*(1+Range Spread)
Paige
Difference at the base vs top of structure. (expanding range spreads)
Bigger range spread at the top, narrower at the base.
Time to proficiency.
Differentiation of skill sets.
Manager input.
Overlap between pay ranges.
Long tenure/high performing employees can earn higher wages.
Provides more cost effective career progression within the org.
Jen will now tie in how your jobs get assigned into these pay grades and ranges.
Jen
So, we’ve identified pay schedules as needed, determined pay grades, developed our ranges, and now - the final step in the process is assigning grades to your positions and adjusting for internal alignment.
So how do we determine which grade a position is assigned to? First, look at the market data at your target in the market. Is your target for this role the 50th percentile? Look at that data point. Is your target the 80th percentile? Then look at that data point. Next, find a midpoint in your structure that most closely aligns with that data point.
In this example, our market data at target is $35,442. Therefore, the closest midpoint is the midpoint of grade 1 at $34,000.
Once you’ve done this for each of your positions, arrange your data to be sorted by the grade assignment, and then move onto the next step of adjusting for internal alignment.
So, you’ve graded your positions based solely on market data, but what if the market data shows a different value than the value the position holds in your organization?
Or, what if the market data is right in the middle of two midpoints?
Well, now we get to look at internal alignment.
In the example shown, the target market data for our Technical Support Rep is $37,669. This falls between the midpoints of grade 1 and grade 2. So, to determine where to slot the position, review the positions that have been slotted into a grade 1, and then review the positions that have been slotted into a grade 2.
From there, determine which group of jobs the technical support rep belongs in based on its similarity in level of responsibility and value to the organization with both groups.
So when you’re done it would look something like this – each position is assigned to a grade and a corresponding range.
Now I’m going to turn it back over to Paige to give us a little bit more information on how to use the pay ranges that we now have for each job.
PAIGE
Determine Employee Placement in Range.
Org needs set range midpoint and width; employee knowledge, skills, abilities, experience, etc determine position in range
Min = New Hire.
Midpoint = Proficient & meeting performance expectations.
Above midpoint = Takes into account tenure, performance, education – whatever org values most.
Develop Guidelines or Policies.
Develop guidelines or policies about:
Where new employees enter ranges.
How current employees move within ranges.
What happens when an employee is promoted?
How much discretion do managers have?
Get specific, where it makes sense.
Develop Processes
The tactical piece after policies/guidelines are created
Ex: manager who thinks job is in the wrong grade – here is the process to follow to re-evaluate the position
Train your managers
PAIGE – fix image?
This is one of the main comparison points that you and your managers should know or have some handle on.
Great way to assess how far into the range any individual employee is, as well as a good measure per department, location, or for the overall organization. Typically 50% on average is the target, knowing that some EES are new in their roles and others are high tenured and/or top performers
Policies can be used to specify how to work with pay ranges and where to place employees.
For example – rates that hiring mangers have approval for may be from 0-33% range penetration, up to 50% RP with HR approval, and anything over 50% requires exec approval.
PAIGE
Centered around the midpoint or point of proficiency, are the min and max. As noted earlier, the min is the for EES with less experience who may be very new in the role and of low proficiency
Midpoint = point of proficiency
Max – high tenure or top performers may be near or at the max
Outlier may exist and should be addressed in your comp policy.
“green circled” = below
“red circled” = above
As defined earlier, this shows an example of RP
Now that you’ve seen the process for developing a pay structure and how to begin using your ranges, we can talk through some of your immediate action items
Jen
While you might have a structure for your whole org, what are some of the circumstances where you might deviate from it.
You might choose to intentionally pay below the structure or above the structure – when might that make sense?
Below structure
Training or in-ramp period – pay below min as a training rate …
Interns
Above structure:
Some people or jobs that are vital to org, will pay whatever it takes
Hot jobs
Sometimes you need to be more nimble. The structure can lock you in a little bit. For jobs that are moving quickly in the market, you don’t necessarily want to be locked in – we’ll talk about how to handle this on the next slide.
Differentials/temp
Person who is covering for someone/job while they are out. Ex: Maternity leave – redistributing the workload for a bit, you don’t want to necessarily change the grade of the job, but maybe give them a kicker of some kind.
If you’ve determined that you don’t want to set a range for a job, you can look at the market data (at your target) and then adjust the pay rate by a person’s experience or performance
When we are intentionally deviating from the structure, there may be some cases where we want to be especially nimble. In these cases, instead of waiting to adjust a range annually, maybe we look at adjusting it quarterly to stay up-to-date
For hot jobs, if you don’t want to continually evaluate and move your range, you can instead pay a market premium to the incumbents on top of their pay to compensate them instead
An example of when you might pay a differential on top of base pay would be if an employee is temporary moved to night shift for example, maybe you pay the EE a differential of $2 on top of their hourly rate while they are on night shift, and then that diff would drop off when they are back on day shift. You want to make this especially clear to your employees, and a way to do this is for the diff to show up as a separate line item on their paycheck.
Another example – asking an EE to temporarily work in a hazardous environment. This often warrants a differential on top of base pay as well.
Paige
Gather info about jobs:
What are the key skills, experience, and education required?
What are the top 3 responsibilities?
Talk with managers
Where are you recruiting (or losing) your talent?
Begin to explain the usefulness of pay ranges