You’ve performed your job analysis and have evaluated positions in your organisation. How do you now create your salary scales ? In this session you will learn : • The different types of salary grading structures (broad banding, narrow banding…) and their pros and cons • How many salary structures should you create ? • Deciding on the overall design of your salary ranges • From simple to sophisticated: different approaches to calculating your minimum, mid, and maximum salaries for each grade. This presentation was used at HR Summit and Expo 2013 www.hrsummitexpo.com

1. Mastering Salary Scales
Sandrine Bardot – Compensationinsider.com

2. JEs are done – now do you go about
creating your salary ranges ?
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How many salary structures you should create
The different types of salary grading structures
Considerations for participating to salary surveys
Deciding on the overall design of your salary ranges
From simple to sophisticated : different approaches to
calculating your midpoints
© Sandrine Bardot 2013

3. What is the maximum number of salary
ranges needed ?
1
2
3
That’s it !
© Sandrine Bardot 2013

4. Defining pay – Various options
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Spot rates
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Pay spines
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Narrow pay ranges
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Broad band salary structures
© Sandrine Bardot 2013

5. Narrow banding
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Prevalent approach in the region
Good for traditional, pyramid companies with many
junior, young employees
Not so good in professional service firms and for
managerial roles.
Clear sense of evolution
Cost control due to low max of range
Regular opportunity for promo
© Sandrine Bardot 2013

6. Broad banding
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Good for start-ups and companies with big focus on
competencies and lateral career development.
More compensation education needed for managers
Fewer promotions : requires more focus on pay-forperformance
Some form of traditional job evaluation still needed to
participate to compensation surveys
Create “payzones” ?
Less cost control on salary increases
Less social proof of employee success and progress
© Sandrine Bardot 2013

7. Salary ranges – building them
© Sandrine Bardot 2013
Image from eridlc.com

8. Design decisions
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Target position to market :
 Define peer group
 Target percentile
 Aging the data : lead/lag philosophy
Decide on your paymix
Step
Spread
Symmetry
© Sandrine Bardot 2013

9. Setting up midpoints
Multiple options :
 One survey, results to midpoint
 Reflect weight of jobs in your company (use the most
“important” job family only for each grade)
 Reflect weight of employee population (eg : 10 Finance,
1 HR)
 Combine multiple surveys and peer groups
© Sandrine Bardot 2013

10. Want to read more ?
http://compensationinsider.com/all-you-need-to-knowfrom-compensation-surveys-to-salary-ranges-andsalary-review/
© Sandrine Bardot 2013

11. Thank you !
+971 566 172 864
Sandrine@CompensationInsider.com
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Sandrine Bardot
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