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Pay Structure

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Individual Pay Determination Creating Equitable Salary Structures

MGMT 4030 - Managing Employee Reward Systems

Salary Structures •







Pay for jobs according to prevailing pay levels and  preferred position (lead, lag, match) in the market Establish pay ranges for each job with a minimum, maximum, and midpoint to the range. Use control points (maximum and midpoint) to control payroll expenses Create pay grades to more simply classify jobs according to similar worth

MGMT 4030 - Managing Employee Reward Systems

Market Pay Line 60000 50000 40000       Y 30000

20000 10000 0 400

500

600

Points MGMT 4030 - Managing Employee Reward Systems

700

800

$$ Maximum

Midpoint

Minimum Salary Pay Grade MGMT 4030 - Managing Employee Reward Systems

Salary Structures •

Minimum  – 

 – 

Provides flexibility to hire new employees who need training and experience. Employee paid more as competency is certified through performance reviews.

MGMT 4030 - Managing Employee Reward Systems

Advantages of Broadbanding •

Facilitate Lateral career moves  – 

 – 



Enhanced flexibility for transfers Cross-functional teams with fluid duties

More flexible pay decisions  – 

 – 

Few control points such as midpoints or salary caps. More pay opportunities based on skills

MGMT 4030 - Managing Employee Reward Systems

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