Developing a wage structure

memiller · August 2001

I have begun working on a wage structure for our company and wonder how much data should be communicated to the employees regarding the salary ranges?

Example: We have 5 pay grades. An employee is in pay grade 2, level 3 = $14/hr mid range. Do we just tell them their own information or show them the entire pay grades for the entire company so they know what position pays what wage? In doing this, don't we lose the confidentiality of people's wages?

Margaret Morford · August 2001

You're smart to be concerned about protecting other employees' privacy. If you publicize the entire scale, everyone will know at least the minimum any one is making in their job.

I suggest showing each individual their own job grade band so that they know what their own range is and what their potential in the current job is. If they bid on a higher paying job, you tell them what their salary would be starting out in the new position. If they sucessfully bid on the job, then you show them the entire the new range since it now applies to their salary potential in the new job.

Call me if you have any questions at 615-371-8200.

Margaret Morford
theHRedge

Don Avery · August 2001

Not knowing the culture of your organization, I can't say for sure what your position should be. I do know that in the culture of my Hospital (1100 employees) total immersion seemed to work well. As part of a total revision of our compensation system, (it seems that one needs to do that about every ten years in Healthcare) we provided LG and range information to each of the employee groups within a specific LG.and specific information to each employee privately as to their new rate. However, if asked by any employee, what LG a particular Job had been assigned, we gave the answer. While we didn't post the Wage Table, neither did we try to make it a secret. Posted vacancies included the LG and hiring range, with the theory that otherwise it would be difficult for employee to know the vacancy could be an improvement over their current job.
My conviction was that it would be wiser to raise one big "dust cloud" and let it die down when employees got the impression that nothing was being hidden other than employees specific pay rate, than to have continuous "dust clouds" raised based on distorted and incorrect information derived from gossip and rumors. Again, it worked well for my situation but I can't say that it would work everywhere.

dhnyct · August 2001

I agree with publishing the entire salary scale. It helps each employee understand where they are and how to set future personal goals. There could be some issues regarding equality should certain employees choose to discuss their individual placement on that scale. That "cloud of dust" could be a problem, especially if advancement has not always been objective in the past. I'm currently hoping to convince management to revive and expand a system used some time ago. We will have some employees in both red and green circles, but it would get us back on a consistent, objective track.

Developing a wage structure

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