Designing a Pay Structure

The number of pay structures required is only one.

The pay structure required stipulates clearly the aspect of equal percentage progression that would be used to determine the salary ranges for each and every grade. The range to be used is at 10% on every side of the midpoint.

Assigning jobs to grades

This pay structure puts into use the formal evaluation processes in regard to assigning jobs to grades upon a well stipulated legal reasons for such a purpose. The assigning of this jobs into grades is done a systematic manner. This pay structure designed will through its system of job evaluation will assign a number of points for a job (Shaughnessy & Levine, 2000). Then it is just a matter of constructing a table for assigning the point ranges to grades as shown in this table.

Job Evaluation PointsGradeJobs
115-2201A,B,C,D,E,F,G
221-3262H,I, J,K,L
327-4323M,N,O,P,Q
433-5384R
539-6445S,T,U,V,W,X,Y,Z

 

Since there are no rules to be followed on this, we just create a reasonable progression.

But for this pay structure the Grade have been gotten by making a 100 points range for every grade from the lowest job A of evaluation points 115.

The evaluation points entails a ranking scale in which the jobs are rated upon with respect to the responsibility and task a job position is structured to accomplish.

Determination of the middle

The midpoint pay rate for the grades would be

GradeMidpoint Pay rate
1$11.05
2$13.125
3$17.4
4$16.5
5$18.25

 

The midpoint pay rate are the salaries allotment for the fully-functioning employees whose performance meetsthe organizations performance objectives.

The midpoint pay rate have calculated on the basis of considering the highest and the lowest midpoint salary of the jobs in the particular Grade and getting their average pay.

The midpoint to midpoint percent progression are:

Between grades 1 and 2: (13.125-11.05)/11.05 * 100 = 18.78%

Between grades 2 and 3: (17.4 -13.125)/ 13.125 * 100 = 32.57%

Between grades 3 and 4: (16.5 -17.4) / 17.4 * 100 = -5.17%

Between grades 4 and 5: (18.25 -16.5) /16.5*100 = 10.61%

Discussion for the midpoint to midpoint progression

Between grades 1 and 2:An individual moving from grade one to grade two would have an increment of 18.78% of from his previous midpoint pay rate to the new midpoint pay rate.

Between grades 2 and 3: An individual moving from grade one to grade two would have an increment of 32.57% of from his previous midpoint pay rate to the new midpoint pay rate.

Between grades 3 and 4: An individual moving from grade one to grade two would have a decrese of 5.17% of from his previous midpoint pay rate to the new midpoint pay rate.

Between grades 4 and 5: An individual moving from grade one to grade two would have an increment of 10.61% of from his previous midpoint pay rate to the new midpoint pay rate.

Pay rate range

The pay rate range for the various grades would be:

GradePay rate range
19.95 – 12.16
211.81 -14.43
315.66 -19.14
414.85 -18.15
516.43 – 20.08

 

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