How do you design a pay structure?
How do you design a pay structure?
► The Process of establishing pay structure consists of five steps and it will also take care of external, internal and procedural equity.
- ❶ Conduct a salary survey of what other employers are paying for comparable jobs (to ensure external equity)
- ☛ Employer can use salary survey data to price or rate benchmark jobs.
What are 4 common pay structures?
What are the four different types of pay? There are more than four different types of pay structures to choose from, although some of the most common approaches used by private sector organisations include individual pay ranges, broadbanding, job families and career families.
What is employee grade structure?
Many employers use an employee grade-level system that helps differentiate between positions and standardize compensation across equivalent skill sets and responsibilities. This type of system helps ensure fair and consistent treatment and compensation for all employees.
What is new salary structure?
According to the new Wage Code rules, the basic salary of the employees should be 50% of the total salary or the Cost to Company (CTC), and not less than this. At present, most companies keep the basic salary of the employees low and the number of allowances remains high.
How are pay grades organized in a salary structure?
Traditional salary structures are organized with numerous layers and range structures (or pay grades) with a relatively small distance between each range. This provides a hierarchal system enabling employees to be promoted from one pay grade to another.
Why do you need to know about salary structures?
Salary structures are composed of pay grades that reflect the value of a job within both the internal organization and external job market. Compensation structures help simplify fair pay and market pricing analyses, making it easier to evaluate pay across job groups.
Why do you need a grade range compensation structure?
Grade range compensation structures help align jobs which are considered similar in terms of responsibilities and rank into specific pay grades. When an employee is promoted, they can be moved from one pay grade to the next.
How are salary surveys used to design pay structure?
☛ It is difficult to set pay rates if you don’t know what others are paying, so salary surveys – surveys of what others are paying – play a big role in designing pay structure ☛ Salary survey aimed at determining prevailing specific salary rates for specific job. ☛ Employer can use salary survey data to price or rate benchmark jobs.