Salary Structures

The Salary Structure -or set of salary scales- is the best synthesis of the philosophy of payment of a company. This tool intrinsically entails the principles of internal equity and the alignment with market payment levels that have been defined as adequate and competitive. The scales provide us with information on the competitive position of each employee, being able to determine through it who is being adequately remunerated, or who requires a review of its remuneration.

A well-designed and managed salary scale allows us to answer questions about why people are compensated differently. It also helps human resources staff to fairly manage and properly communicate any payment philosophy. And they can reflect a particular business strategy, for example by remunerating some people or positions in the market and others above. It is necessary to understand the compensation drivers of all segments of the business to determine if a single pay scale will work for all employees, or if different factors (e.g. high demand for specific talents, turnover, others) will require managing the compensation of different groups differently, i.e. with different pay scales.

CompStrategy can help with:

• Assemble salary scales to accurately reflect payment strategy, either by adjusting to the market or by applying some strategic differentiation
• Establishment of Salary Bands with their minimum, maximum and amplitude, as well as the progression between midpoints
• Identify the payment strategy that best fits the business plan and its relationship with the labor context
• Technical review of the current scales considering parameters such as regression curves, compensation elements (fixed, target variable, real variable, others), incumbent vs. company, or incumbent vs. individual data, or vs limited individual data, etc.