Salary Ranges: How Much Should Employees Be Paid?

When determining the wages of your staff, it is helpful to group jobs into some sort of grade structure and administer common salary ranges for all jobs of the same grade. The most common method of grouping jobs is to use an evaluation approach that measures work on the basis of skill, effort, responsibility, working conditions and other factors. You can give point values for various components of each distinct job, and the points can be used to group jobs into appropriate salary ranges.

Here are three basic steps to establish a structure:

Prepare proper documentation:

Jobs need to be properly documented so all stakeholders are aware of the relevant content factors for each job. This has significant benefits to employees and employers that go beyond supporting the salary grading structure.

Evaluate all jobs:

A process to convert the content of each job into point values is required. Once all jobs have point scores, they can be divided up into the grade structure of your choice.

Establish grade structure:

Select the structure that is most appropriate to the organization, such as narrow grades, standard grades or broad bands.

Once the jobs that fall within each grade are known, a salary range can be established for each grade. The pay package has to be enticing enough to attract top-quality employees in a competitive market, motivate them to perform and keep them growing rather than moving on.