Best practices for designing salary structures

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1、IBMSoftwareThoughtLeadershipWhitepaperBestpracticesfordesigningsalarystructuresAframeworkforemployeecompensationprogramadministrationBestpracticesfordesigningsalarystructuresOrganizationsdevelopandimplementsalarystructurestoprovideaframeworkforadministeringtheiremployeeCompanyjobstoEvaluatedjobsar

2、rangedincompensationprograms.Effectiveadministrationofabeevaluatedajob-worthhierarchycompensationprogramrequiresabalancebetweenthepayNon-BenchmarkJob10levelsforemployeesinsidethecompany–internalequity1–andJob9thepaylevelsthoseemployeescouldcommandintheJob6company’srecruitingmarkets–externalequity2

3、.Non-Job8BenchmarkBenchmarkJob7Job9Job7HowtodevelopasalarystructureBenchmarkThemajorityofcompaniessdeterminetheiremployeepayBenchmarkBenchmarkJob1Job6Job10levelsbyevaluatingmarketpaylevelsforthemajorityoftheirBenchmarkJob5Job5jobs.Compensationprofessionalscallthese“benchmarkjobs.”3Job8BenchmarkNon

4、-Job4Incontrasttobenchmarkjobs,non-benchmarkjobsarenotevaluatedforthepurposeofdeterminingmarketpaylevels,Job3BenchmarkJob3usuallybecausemarketdataisunavailable.Job2Job2BenchmarkJob4ThemarketpaylevelsforbenchmarkjobscanbearrangedfromJob1highesttolowesttoassesstherelativevalueofeachjob.Thecompany’sn

5、on-benchmarkjobsarethenslottedinbetweenFigure1:Jobevaluationstructurecomparablebenchmarkjobstocreateajob-worthhierarchythatincorporatesboththeexternalvalueandthecompany’sEvaluatedjobsinternalvalueforjobsinrelationshiptoeachother.TheJobsassignedtoarrangedinajob-Worthsalaryrangesjob-worthhierarchyfo

6、rmsthebasisforgroupingjobsofsimilarhierarchyvalueandestablishingtheclassificationsthatcomposetheJob10company’ssalarystructure.Job9Figure1illustratestheprocessofevaluatingcompanyjobstoJob8createajob-worthhierarchy.Thechallengeillustratedin$36,000-$54,000Figure 1istoassessthevalueofcompanyjobsbasedo

7、nexternalJob7andinternalfactorsasameansofarrangingthejobsfromJob6highesttolowestvalue.Acompanycanconstructitssalary$30,000-$45,000Job5structureoncethejob-worthhierarchyhasbeencompleted.Buildingthesalarystructurei