Design a Base Pay Structure
Build a base pay structure that is defensible, competitive, flexible, and practical.
RETIRED CONTENT
Please note that the content on this page is retired. This content is not maintained and may contain information or links that are out of date.Without a well-defined base pay structure, organizations risk:
- Increased labor costs
- Decreased productivity from disengaged employees
- Increased costs through employee turnover
- Pay equity lawsuits
By designing a well-defined base pay structure, HR is able to:
- Be confident that the base pay structure is equitable and aligned with the compensation philosophy
- Empower managers as co-owners who engage their employees in pay discussions
- Better move toward greater pay transparency
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Workshops are a great way to accelerate your project. Our highly skilled facilitators take you through key phases of your project and ensure your team has the guidance needed to complete your project successfully.
Module 1: Analyze Market Data
The Purpose
- Identify metrics that will be used to determine project success.
- Match benchmark jobs to market data and create preliminary pay bands.
- Determine how many base pay structures the organization needs.
Key Benefits Achieved
- Benchmark job descriptions matched to market data capsules.
- Preliminary pay bands created and number of pay structures determined.
| Activities: | Outputs: | |
|---|---|---|
| 1.1 | Set project metrics and take baseline measurements. |
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| 1.2 | Review benchmark jobs and determine market matches. |
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| 1.3 | Weight and input market data. |
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| 1.4 | Group jobs into grades and develop preliminary pay bands. |
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| 1.5 | Determine the number of base pay structures. |
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Module 2: Create Base Pay Structure
The Purpose
- Overlay organizational base pay data for both benchmark and non-benchmark roles.
- Model alternative base pay structure options and select the best-fit option.
Key Benefits Achieved
- Finalized pay band structure determined.
| Activities: | Outputs: | |
|---|---|---|
| 2.1 | Review and adjust the range spread, range overlap, and midpoints of preliminary pay bands. |
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| 2.2 | Compare against organizational data and adjust preliminary pay bands. |
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| 2.3 | Model base pay structure alternatives. |
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| 2.4 | Select the best-fit base pay structure. |
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Module 3: Set Salary Administration Guidelines and Transparency Strategy
The Purpose
- Review existing salary administration guidelines and update accordingly to better suit new base pay structure(s).
- Create a pay transparency plan.
- Draft a communication plan that is well aligned with goals from the transparency strategy.
Key Benefits Achieved
- Salary administration guidelines updated according to new base pay structure(s).
- Pay transparency plan created.
- Communications plan aligned to the transparency strategy drafted.
| Activities: | Outputs: | |
|---|---|---|
| 3.1 | Develop salary administration guidelines. |
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| 3.2 | Evaluate current state of pay transparency. |
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| 3.3 | Determine desired future state of pay transparency. |
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| 3.4 | Develop a pay transparency strategy. |
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| 3.5 | Craft a communications plan. |
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