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Salary Banding Examples, Formats

salary banding modelsI am working on a project for our 200 person technology company to put together a salary band structure in place.   Since I am starting with a blank piece of paper, I was wondering if anyone had any structures, formats or examples that could assist me.

 

 

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Why not look at the Federal system and any local governments that utilize such a system. Then adjust compensation for your area and industry.

Jill Nickerson
Title: CFO
Company: In Transition
(CFO, In Transition) |

Our salary bands range +/- 20% of the "norm" for each range. Then we break the band into "quin-tiles" and pay based on performance or knowledge of job. We have written descriptions of what it takes to be in each quin-tile, but the expectation is if you are not new at your job you should at least be in the 3rd quin-tile, where the "norm" lies.

The salary for the norm in each band is separated by approximately 10%.

Topic Expert
Keith Perry
Title: Director of Global Accounting
Company: Agrinos, Inc.
(Director of Global Accounting, Agrinos, Inc.) |

Adding to Jill;
When dealing with people outside of the US, age and education can also get factored in (yes...I was appalled. I'm just grateful I wasn't asked to include race and gender).

Generally we prefer to break out COLA regions as well (really cost-of-employees). Most of the major accting firms have decent surveys, as well as does Salary.com, etc.

Norms I have dealt with have been similar as far as banding goes.

In more complex situations where skill, age, seniority, geo, etc come into play, we try to regress or weight the factors so that they are taken into account proportionately. You can then plot salaries against the factors and see if they stay within a respectable range.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

Edward,
check out www.eridlc.com for free access to courses / content that provide instruction to set up salary structures... generally speaking you want to have detailed understanding to the job content for each position, good competitive market data with end game of identifying pay practices for the more strategic jobs that drive business growth vs non strategic jobs. Hope this helps.

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