Job grades – how do you set them up?


Okay, now that’s just me being snippy. It is important, though, to be careful when setting up job grades. If you’re not careful, or perhaps more to the point informed, you can end up with a mess that does more harm  than good.

Rate Range image from BLR.

Rate Range image from BLR.

By informed I mean that you need to know market rates before you can successfully administer a job grade program. For example, you could decide to have 2 job grade families (exempt and nonexempt) and 10 grades within each family.

That’s great, you have job grades. But what about those market rates? What exactly are they? Where do you find them? How many do you need?

In a nutshell, market rates are data compiled from surveys of many organizations’ pay rates for a wide array of jobs all across the country.

There are lots of places where you can find salary data. For example, Ive worked with data from both Mercer and Towers Watson (formerly Watson Wyatt). I’ve worked with salary data from the local Chamber of Commerce and industry surveys conducted by trade groups. Of course, there’s my personal favorite—Salary Finder at—and there are other online resources for salary data as well.

I recommend using market data from at least three salary surveys to make sure you’re working with accurate salary information rather than anomalies.

Below are a few resources for detailed information on developing pay structure …

Compensation Update: How to Manage Base Compensation with Pay Grades

Pay Grade Update: Retain Top Talent and Stay Market Competitive in 2013

Pay Grades and Job Value: How to Correctly Assemble All the Pieces of the Compensation Puzzle

Pay Grades that Work: How to Retain Top Talent and Stop Compensation Complaints

Pay Grades That Work: Retain Top Talent and Stay One Step Ahead of the Competition

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