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OBJECTIVES OF SALARY
SURVEY:

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TYPES OF SALARY
SURVEY:

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TYPES OF DATA GATHERED
ON SALARY SURVERY

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HOW TO CONDUCT
SALARY SURVEY:

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SALARY SURVEY CHECKLIST:

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PAY STRUCTURE:
PAY STRUCTURE OR SALARY STRUCTURE: refers to the hierarchy of job grades and pay ranges
established in a company. They may be expressed in terms of job grades, job evaluation points or
policy lines.

Job grades: are collection of jobs that are considered having the same value or worth for
compensation purposes. Job grades are similar to pay grade where all jobs having the same pay are
grouped together except the jobs in a job grade similar descriptions and specifications whereas job
in the same pay grade might not have the same descriptions and classifications

Pay structure they are useful for standardizing compensation practices. Most pay structures
include several grades with each grade containing a minimum salary and either step increments or
grade range. Pay for each job is pre-determined through collective bargaining.

FACTORS TO CONSIDER FOR THE PROCESS OF BASE COMPENSATION:

Job content: the job expected to be carried out by the employee and his worth to be on that
particular job
Bargaining power of the trade union, or that of the employee, representing the trade or the job
Remuneration level in the industry,
Ability of the firm to pay
Productivity, profitability
Cost/standard of living in the environment of the organization
Government 7
Regulations
ROLE OF PAY STRUCTURE:

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INPUTS IN COMPENSATION
STRUCTURE:

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ANALYSIS OF PAY STRUCTURE:

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Factors to Determine Compensation Pay Rates:
These are the factors which affects the individual difference in pay
rate:

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PAY STRUCTURE Cont’:
TYPES OF PAY/JOB GRADE AND PAY STRUCTURE:
1.NARROW – GRADED STRUCTURES:
It is the almost universal type of structure in the private sector. It can be
described as a single-graded structure to distinguish it from a career or job family
structure, or broadbanded structure.

A narrow or single structure consists of a sequence of job grades into which

jobs of broadly equivalent value are placed. A pay range is attached to each grade.
The maximum of each range is typically between 20% and 50% above the
minimum. Eg 40% could span from 20,000 – 28,000/-.
they also described as a percentage of the mid-point for example the range
could be expressed as 80% to 120% where the mid-point is 25,000/= and the
minimum and maximum are 20,000/= and 30,000/= respectively. Mid-point
referred to as the ‘reference point’ or “target salary’ which refers as the rate for a
fully competent individual and is usually aligned to market rates in accordance
with company policies on the relationship between its pay levels and market rates
for similar jobs.

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PAY STRUCTURE Cont’:
Wage Rates NARROW GRADED STRUCTURE

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TYPE OF PAY STRUCTURE cont’:
2. BROAD BANDED PAY STRUCTURE: This types compresses multi-
grades structures into four or five bands. It contains no more than five
bands . The process of developing broad-banded structures is called
“broad-banding”. Broad-banding means the number of grades is
compressed into a relatively small number of much wider bands. Jobs
may be placed in the bands purely be reference to market rates or be a
combination of job evaluation and market rate analysis.
Band B
Zone B1

Zone B1

Zone B1 X

X
Band A
Zone
A3

Zone A2 X

Zone A1 x

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A broad-banded Structure diagram
PAY STRUCTURE Cont’:
BROAD BANDED PAY STRUCTURE

Pay – Policy Line

c g
Wage Rates

a f
KEY:
a: Range Maximum
a
b: Range Minimum
a-b: Range breadth
c,d: overlap
a-c: Grade Width
d e,f,g: Midpoints
b

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Job Evaluation Points
TYPE OF PAY STRUCTURE cont’:
3. CAREER FAMILY STRUCTURE: It consist of jobs in a function or profession.
(For examples functions IT, HR, FINANCE and profession or Occupation
engineers, research scientists). Jobs are related through the activities
carried out and the necessary knowledge and skills required. But the levels
are differentiated through responsibility, knowledge, skill or competence
needed. In effect, a career structure is a single – graded structure in which
each grade has been divided into families.

Family/ Engineering Research IT Finance HR

level Scientist
1 Level 1 Level 1 Level 1 Level 1 Level 1

2 Level 2 Level 2 Level 2 Level 2 Level 2

3 Level 3 Level 3 Level 3 Level 3 Level 3

4 Level 4 Level 4 Level 4 Level 4 Level 4

Career Family Pay Structure diagram

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TYPE OF PAY STRUCTURE cont’:
4. PAY SPINE STRUCTURE: It consists of hierarchy of pay or spinal column
points between which there are pay increments and to which are attached
grades. In short it consists of incremental pay points (lowest to highest)

A scale showing the rates of pay for employees working at each level of an
organization. It also shows the increases in pay an employee gets when they
spend a certain length of time at a particular level.

Job grades are aligned to the pay spine and the pay ranges for the grades are
defined by the relevant scale of pay points. The width of grades can vary and
job families may have different pays spines. Progression through a grade is
based on service, although an increasing number of organizations provide
scope for accelerating increments or providing additional increments above
the top of the scale for the grade to reward merit.

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TYPE OF PAY STRUCTURE cont’:

Pay Spine Structure diagram

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