Creating Job Grades/Salary Ranges
Electricsupply
3 Posts
I work for a distribution company where most of the employees are warehouse workers or delivery drivers. I have been asked to create job grades and salary ranges for these positions. I have been looking a several different salary surveys to find the information on the salary ranges but I need some guidance on creating job grades. Please help! Thanks!
Comments
If all pickers are essentialy the same, then there's no need for a job grade. If you have widely different types of products with very different types of packing equipment and materials and people learn these over time through ongoing training programs, then you have different grades of packers. Are there people who can pick and pack and do both jobs in their entirety? That sounds like something that could, potentially, provide a separate job grade, too.
Think about whether or not each role has multiple tiers of skill and that will provide you with most of the break points you need for job grades, if any are applicable.
I have not seen job grades for each position. What I have seen is jobs that fit into job categories and for each category there is a pay range. Here is an example:
Category I - packers, sorters, hangers (pay range $6.00-9.00/hour)
Category II - assemblers (pay range $8.00-11.00/hour)
Category III - loaders, unloaders (pay range $10.00-15.00/hour)
I strongly suggest getting the textbook "Compensation" by Milkovich and Newman. It is the study guide for one of the Compensation exams under the CEBS program and goes into detail on setting up comp plans....down to ranges/grades, midpoints, etc.
Different job titles along with different years of experience will put employees into different job grades. It is possible that two people doing totally different jobs with different amounts of experience will be in the same job grade. Milkovich and Newman define "job grade = pay grade" to be One of the classes, levels or groups into which jobs of the same or similar values are grouped for comp purposes. All jobs in a pay grade have the same pay range -- min, max and midpoint".
1st step is to group different jobs that are considered substantially equal for pay purposes into a grade. Grades enhance an organization's ability to move people among jobs within a grade with no change in pay. To slot jobs into a grade, the analyst needs to reconsider the original job evaluation results....He goes on to say that they are challenging to design....and that resolving dilemmas requires an understanding of specific jobs, career paths and work flow of the organization...and involveds trial and error along with considerable judgment.
I strongly suggest the Compensation Management Specialist certificate from CEBS if you want to move into compensation management.
Oh, I understand now.
Typically, you look at the knowledge, skills, and abilities required for each position. Some of them are compensable, such as "understands the Company's product coding scheme". Some of the are not compensable, such as generally available skills that you can get most anywhere such as "can communicate orally and in writing in English at an 8th grade level or above".
You'll see that some of the job requirements overlap or are largely of the same value to the Company and that's one way to get job categories.
Going in the opposite direction, you can ask a question like, "What is it about loaders and unloaders that makes their time more valuable than that of packers, sorters, and hangers?" Harder to get? Harder to keep? Special equipment or product knowledge requirements?
I'll throw in that Strategic Compensation by Joseph Martocchio is considered by some to be a better source from a practical/implementation standpoint.
Milkovich has been around for a long, long time and is probably the best known and most commonly referred comp text.
I'll have to look for the Strategic Compensation book. The Milkovich book does a really good job explaining the basics of different types of programs and is a good starting point from the knowledge aspect. Honestly, we don't do grades at my company. We are so small that we really do not need to. Instead we look at each job and employee. Partially because many employees fill more than one role (Boat Captain and IT manager, just to name one!)
That is an interesting combination of jobs, HRforMe! But when you work for a small company that is what tends to happen. We don't have grades here either. I had the job categories and pay ranges at a previous company. The one thing I found was that it was really important to have a conversation with the employees about the pay range and what would happen when they reached the top of the pay range. Yes the ranges will change over time because of changes in the market, but I had employees that had been in the same job for 15-20 years and came to me when I first got there asking why they were not getting a raise (other than COLA) each year. The reason was they were at the top of the pay range. It was sometimes a difficult conversation trying to make them understand that they would have to move up into another position in order to make more money.
Thanks for the recommendations on the compensation books. I think I read the Strategic Compensation book for a class I took but I haven't read the Milkovich book.