Pay Grades

HRH

We are a small (58 employees)design and manufacturing company which has grown quickly over the past few years. We need to develop a system of pay grades, and I'm not quite sure where to begin. And once a company has pay grades in place and an employee reaches the max, then do you simply give cost of living increases??

Don D

As to the second half of your question, we (I) do a month long annual wage and benefits survey in the labor market area and ALWAYS adjust the start and end steps of all pay grades. So, in effect, It's rare that anybody ever tops out. We review all hourly employees every 90 days until they do top out. If someone tops out, the wage review bumps the end step back out and they are reviewed in accordance with that policy until they again top out. Any credible wage scale/range plan assumes that the scale is not stagnant, but a breathing tool.

HRinFL

For most of our positions (hourly), we have three levels (I, II, III). For the pay scale, it is divided into three sections that correspond to a level. So someone at level I hired at the minimum for the position can move to the top of level I pay when evaluated. Once they demonstrate additional skills that are required for the level II position, then they can moe into that pay scale, and so on.

We evaluate new ees at 30, 60, 90 days. After that every six months.

Pay scales are reviewed annually. We do not give a "cost of living" raise. We generally pay in the higher range of our market, but normally increase the scale in order to continue to attract the level of applicants we want.