Description

What is a “pay structure”? A pay structure can be thought of as a “measure of the marketplace” of pay rates relevant to your business. Why is having a pay structure a good idea? An old Sioux proverb can help us. It states “if you don’t know where you are going, any road will get you there”! In a similar sense, if your company doesn’t have a pay structure, you “don’t know where you are” relative to the marketplace of pay rates. You may be paying your employees above, below or (hopefully) “competitively” with the marketplace.

In this course we will build a pay structure using pay survey data, the only true source of pay information to utilize in this process. We will do so without the use of Regression Analysis, a method commonly found in Compensation textbooks, but which possesses its own disadvantages, not to mention its technical complexity for some users. Using a hypothetical database of pay, we will create a pay structure consisting of pay range Minimums, Midpoints and Maximums. We will describe the importance of “Weighted Averages” and the key role that your most important and most highly populated jobs play in its creation.  This method of pay structure development may be used at any organizational level, including Corporate, Divisional and Plant facilities.