Compensation :

Need to set up a Compensation Structure or Modify an Existing One?

Workipedia has a job evaluation tool and a job evaluation form that can assist you in setting up a job evaluation process. We also have policies, procedures and templates for communicating job evaluation results to your employees.  You can view all of those tools right here. 

How you pay your employees is important for your business. Are you paying enough to be competitive with the industry, are you treating employees fairly? If you pay too little, you may have difficulty hiring or keeping employees, pay too much and you may have issues with absenteeism. Having a good compensation program ensures that employees feel valued, which encourages motivation, productivity and the length of time an employee will stay with your organization.

Your goals in developing a compensation program should be to:

  • make salary decisions based upon qualifications for the job, contributions, performance, equity and budget considerations;
  • encourage and reward good performance
  • provide salary increases, when appropriate, within available funding;
  • motivate employees by demonstrating the link between performance and pay.

Here are some common steps to develop a salary structure for your company.

  1. Establish a compensation philosophy. Each employer needs a policy which outlines their desired market position. You want to pay within a certain percentage of what other employers are paying (called percentile). Many organizations try to stay within the 50th percentile. to remain competitive. Its also important to understand who your comparators are (companies similar to yours). You will want to compare what you pay to what they pay.   A good compensation policy provides guidance for the development of your salary structure.
  2. Gathering your market data. Salary surveys are available online and or can be purchased through many organizations. There are also many free online resources that can assist such as
    Its best to use salary surveys with your identified comparators and to have at least 3 survey resources to ensure your data is accurate. Surveys should also be sector specific and regional. Smaller cities do not pay as much as larger cities, so this can be a factor when determining salary information.
  3. Identify your benchmark jobs.  Benchmark jobs are those standards jobs that tend to be the same across every organization such as Executive Secretary, Accountant, Human Resources Clerk, Payroll Supervisor. Benchmark jobs are easy to understand and match to, and will appear in salary surveys.
  4. Set up your job hierarchy. Identify the lowest paid job (typically entry level) and the highest paid job in your company – sticky notes are great for this. Set up your hierarchy and utilize some of the benchmark jobs to identify where these sit in the salary grids. Your budget will also determine what you can pay and what your grids should look like.
  5. Set up your wage scales – These scales will determine what you pay for each job that falls within a certain job family. Typically these scales will have salary tables called bands and several steps within those bands to reach what the job is worth on the market.

BAND Step 1 Step 2 Step 3 Step 4 Step 5
BAND A $134,209 $138,235 $142,382 $146,653 $151,053
BAND B $119,830 $123,425 $127,128 $130,942 $134,870
BAND C $106,991 $110,201 $113,507 $116,912 $120,419
BAND D $95,527 $98,393 $101,345 $104,385 $107,517

Once you’ve completed these steps – you will need to develop a Job Evaluation System in order to determine the value of a position within your organization . Job evaluation determines the value of one job in relation to others in the organization in order to ensure a fair job hierarchy and/or salary system is in place. Workipedia has a complete system for conducting job evaluation. Our compensation pay band generator can help to automatically calculate a salary table based on your lowest starting salary an our automated job evaluation tool is already programmed based on ten compensable factors.