Hold on to your top talent. Learn how to effectively use pay grades to stay competitive and keep your best employees from jumping ship. Pay grades are a fair, effective way to manage your base compensation rates and keep you competitive within your market.
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Get Your Report Now!Setting up accurate, fair pay grades can form a solid foundation for your entire compensation program, and make your payroll management less complex. But if you’re just starting to implement such a system, you may be confused about where to begin. You also may find yourself facing employees who don’t fit into the standard pay grades for one reason or another or who have maxed out at their existing pay grade.
In a BLR webinar titled "Pay Grades that Work: How to Retain Top Talent and Stop Compensation Complaints," David Wudyka explained some of the benefits of implementing a formal pay structure.
Why Do We Need Pay Ranges?
Pay ranges act as a measure of the marketplace. "if you don’t know what the market is paying for the jobs that you employ, then you don’t know where you stand relative to that market,” explains Wudyka.
"So, that’s why we prepare pay ranges. That’s why we do market pricing. Because we need to gather that pay data from the marketplace and then create our pay ranges so that we understand the boundaries of pay, we don’t know where we stand relative to that market if we don’t engage in market pricing. Pay ranges document that information for us, once we have studied the pay data that we acquire."
You can use an internal job evaluation and compare that with market pricing, which can be your first step to ensuring you have equitable pay ranges and have a reduced risk of losing your top talent to the competition.
In a related article, David Wudyka outlines key concepts related to pay ranges.
For more information on pay grades and pay ranges, order the webinar recording. To register for a future webinar, visit http://catalog.blr.com/audio.
David Wudyka, managing principal and founder of Westminster Associates, manages and oversees all company operations, including the design, development, and implementation of all client HR programs. His specialties include human resource analytics, audits of HR operations, employee retention strategies, and group incentive plans.