• Replies 18 replies
  • Subscribers 3 subscribers
  • Views 4400 views
  • Users 0 members are here
Options
Related

Can you work out salaries without a grading structure?

Danielle

Hi All

We are looking at reviewing how we work out salaries. At the moment we have a graded structure from 1 to 10 (mostly up to 7 though as from then it's Director levels) and we work out what grade we want a position to be and pay accordingly within a range.

However our new CEO HATES this method and wants to remove "grades" from roles so that we pay purely by how experienced/ qualified each individual is.

Does anyone have any experience on systems that don't use grading when creating pay levels?

Parents
  • To answer the question in the OP: yes, I have, and I hate it.

    Would your CEO like to put a value on an A Level in English Literature over a GCSE in Mathematics? What about a value on 3 years' CAD experience versus 7 years'? But what if the former's experience was in your exact industry but the latter's was only in a related industry? But what if the former also has a formal qualification but the latter doesn't?

    What if next year your industry body de-recognizes the formal qualification?

    What if, instead of trying to put a cash value on each and every criterion you just decide to make a judgement call on each person? But, obviously, you wouldn't want person A to know that person B is paid £2.5k per year more, because it's hard to explain why that's the case, because it was just a judgement call. Ah, but person B is a woman. Oh, but person A is from an ethnic minority group.

    Quick! Don't tell anyone what anyone else earns!!

    Yeah, because that's never a topic of conversation.

    Long story short: the moment your business is moving out of the S and towards the M in "SME" you need to think about salary structure.

    Whether you go with grades, bands or some other method will depend on your culture and aspirations. It's all very well for the CEO to say "but I HATE that". Try, instead, to get him or her to articulate what it is that he/she hates about such structures so you can tailor one that avoids or minimizes those issues.
Reply
  • To answer the question in the OP: yes, I have, and I hate it.

    Would your CEO like to put a value on an A Level in English Literature over a GCSE in Mathematics? What about a value on 3 years' CAD experience versus 7 years'? But what if the former's experience was in your exact industry but the latter's was only in a related industry? But what if the former also has a formal qualification but the latter doesn't?

    What if next year your industry body de-recognizes the formal qualification?

    What if, instead of trying to put a cash value on each and every criterion you just decide to make a judgement call on each person? But, obviously, you wouldn't want person A to know that person B is paid £2.5k per year more, because it's hard to explain why that's the case, because it was just a judgement call. Ah, but person B is a woman. Oh, but person A is from an ethnic minority group.

    Quick! Don't tell anyone what anyone else earns!!

    Yeah, because that's never a topic of conversation.

    Long story short: the moment your business is moving out of the S and towards the M in "SME" you need to think about salary structure.

    Whether you go with grades, bands or some other method will depend on your culture and aspirations. It's all very well for the CEO to say "but I HATE that". Try, instead, to get him or her to articulate what it is that he/she hates about such structures so you can tailor one that avoids or minimizes those issues.
Children
No Data