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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?

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  • Hi Danielle. We are a medium sized organisation and we don't have any kind of structure, certainly don't grade roles other than in one particular department, most roles we just try to remain as competitive as possible and we dislike bureaucracy here. You're always going to have that one person who breaks your mould and we like to be agile enough to keep those people. We try to benchmark roles where we need to by looking at the market, we also rise salaries in line with the cost of living or give a merit rise. It has never bitten us but I suppose that's a risk your CEO will have to consider the risks (equal pay etc.) as we also have very low grievance / disciplinary rates as well. Have you ever seen that Netflix slide deck about paying what people are worth? It is a bit American but its good for thought!
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  • Hi Danielle. We are a medium sized organisation and we don't have any kind of structure, certainly don't grade roles other than in one particular department, most roles we just try to remain as competitive as possible and we dislike bureaucracy here. You're always going to have that one person who breaks your mould and we like to be agile enough to keep those people. We try to benchmark roles where we need to by looking at the market, we also rise salaries in line with the cost of living or give a merit rise. It has never bitten us but I suppose that's a risk your CEO will have to consider the risks (equal pay etc.) as we also have very low grievance / disciplinary rates as well. Have you ever seen that Netflix slide deck about paying what people are worth? It is a bit American but its good for thought!
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