We’re on the topic of developing fair and equitable pay in organizations. For background on the series and the importance of pay transparency, please see Installment 1: Overview and Key Steps.
Examining the current pay scale (sometimes called a salary schedule) is the first in-depth activity for leadership in understanding how employees are paid. If none exists, create one.
Here’s a sample of what we include at Upward Development when building pay scales to document current pay in an organization:
Note: I’m recommending a pay scale by position first, without naming individual employees. This supports more consistent budgeting, pay transparency and equitable compensation practices for organizations.
Establishing pay ranges and grades by position is a more objective and evergreen exercise, because the pay scale applies to an organization regardless of the people occupying each role.
A second phase of analysis might include a by-name pay scale, which would highlight disparities in pay for people holding the same positions. This is a far more complex technical exercise because seniority, expertise, and other issues must be taken into account. Of course, the human aspects of reviewing and adjusting pay are also very personal; it’s best to tread carefully on this ground.
Once the pay scale is complete with current and accurate data, it’s possible to identify:
Check back next week for tips on how to complete a wage comparability study (external data) to go with your pay scale (internal data). Comparison of the two will ultimately lead to a new pay schedule, which outlines the desired wages and pay ranges for each position.
Thanks for reading!