Perform job evaluation
Job evaluation is the process for assessing the relative worth of jobs within an organization. Paying fairly based on internal relative worth is called Internal Equity. A comprehensive analysis of each positions tasks, responsibilities, knowledge, and skill requirements is used to assess the value to the employer of the work performed and provide an internal ranking of the jobs. Job evaluation is a measurement of the internal relativity of the position and not the incumbent in the position. Job evaluation can be used independently, although it is usually part of a compensation system designed to provide appropriate salary ranges for all positions. This process will ensure an equitable and defensible compensation structure which compensates employees fairly for job value.
Review pay structures
Pay structures are helpful when standardizing your organizations compensation practices as they reflect the grouping of jobs based on relative worth. Typical pay structures can have several grades or levels, career bands, or job families with each having a minimum or maximum salary associated. These could be identified by hourly wages or annual salaries.
A number of levels may exist for a role or types of roles linked together, and for each, a dollar value would be associated. Creation of pay structures are based on internal and/or external data.
The most basic salary structure is one in which each job class is a level with a single salary for all incumbents within the level.
This is seen as somewhat limited as employees (or potential employees) come with a variety of experience and skills and therefore should not all be compensated at the same rate.
An alternative to the basic salary structure is to incorporate salary ranges for each of the different job levels.
Placement in the range is based on established criteria outlining experience, skill, potential and fit
The scale is usually created by evaluating the market comparative data however, the placement of the person in the salary range is usually based on their skill and ability against other employees in the same role
Criteria for moving through a salary grade must align with the compensation philosophy and should be described in the Compensation Policy.
Building a matrix that identifies the hierarchy of the job family through levels as well as skills and competencies can assist in determining the appropriate placement of a position.
Example: Caseworker roles against Market data (numbers have been made up for purposes of this example)