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Design a Base Pay Structure
Balance internal equity and market competitiveness to build an effective base pay structure.
Traditional base pay structures are seen as bureaucratic red tape that hinders a manager’s hiring ability. Designing base pay structures can be complex, requiring accurate data collection and a significant time investment from HR and managers. Pay transparency is difficult given the sensitive and highly confidential nature of pay information.
Executive Summary
Critical Insight
A credible compensation structure provides the foundation for increased pay transparency, and a hybrid approach to building the structure enables the right balance between flexibility and standardization to ensure equity and fairness.
Impact & Result
Design a pay structure that is internally and externally equitable by balancing the internal job worth hierarchy with external market competitiveness. Leverage McLean & Company’s approach to building a hybrid pay structure that benefits from the advantages of the traditional and broadband approaches.
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Research & Tools
1. Collect and analyze market data
Collect, analyze, and examine market data using the organization’s compensation philosophy as a filter.
2. Create the base pay structure
Create and finalize the base pay structure.
3. Determine salary administration guidelines
Identify and develop salary administration guidelines tailored to the organization.
4. Prepare to roll out the transparency strategy
Develop a pay transparency strategy suited to the organization and draft a communication plan.
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Each blueprint can be accompanied by a Guided Implementation, which gives you direct access to our world-class analysts who will connect with you at critical milestones to advise, coach, and ensure your project stays on track.
Guided Phases: Design a Base Pay Structure
1
Collect and analyze data
Call 1
Determine the market comparator criteria that are relevant for your organization.
Call 2
Review benchmark jobs and their market data.
2
Create the base pay structure
Call 1
Identify the number of base pay structures that your organization needs and understand the main components of a hybrid base pay structure.
Call 2
Walk through determining appropriate job grades and pay bands for a sample data set.
3
Determine salary administration guidelines
Call 1
Establish guidelines for moving between pay bands and between pay structures.
Call 2
Determine criteria for hot skills and set parameters for hot skills premiums.
4
Prepare to roll out the transparency strategy
Call 1
Define desired and current levels of pay transparency and develop a strategy to close the gap.
Call 2
Create a communications plan for the first year of the pay transparency strategy.
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Contributors
Bessie Mok, Manager, Compensation and Benefits, The Corporation of the City of Markham Cal Barber, Independent Compensation Consultant; Professor, Seneca College of Applied Arts and Technology Chuck Csizmar, Principal, CMC Compensation Group Dr. Howard Risher, Private Consultant Jackson Tian, Senior Analyst, Compensation Advisory, OMERS Karen Nordby-Wadel, Compensation Consultant Kate Beckett, CCP, Senior Director of Total Rewards and HR Technology, Indigo Paul Wong, HR Consultant, Consulting Firm Rachel Wong, CCP, GRP, CHRL, Senior Manager of Global Compensation, Kinross Gold Corporation Steven Osiel, Vice President of Compensation & Incentives, Accompass; Lecturer at the University of Toronto Syma Khan, CCP, CHRL, CSA, Senior Compensation Manager, Loblaw Companies Limited Terra Aartsen, CCP, GRP, Practice Lead - Learning & Development Solutions, Info-Tech Research Group Tia Wang, HR Consultant, Consulting Firm
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