Can you work out salaries without a grading structure?

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?

  • Hi Danielle
    We are trying to move away from the grade culture of "Why is he a 5 when I'm only a 4?" etc and are using job banding/job 'families' . Within each family is a scale point e.g £25k-£28k and there are levels of responsibilities so it is clear to see where people fall and what family they belong to.
    Good Luck!
  • Ashleigh, I'm going to be tackling such a project this year, would you mind sharing how you are going about it? It would be great to have another to bounce ideas with. Claire
  • You could always use families and competencies and align a salary band to the relevant family and level of competency. This way you still have an open and transparent way of aligning salaries.
  • This is the way we are going to go I think. I have set up 4 "bands" which are basically unskilled, skilled, middle management, senior management. The job specs within these groups will depict the skill level required and there will be a salary range as well.
  • Hi Ashleigh,

    How has your project of job evaluation, banding ad pay grading gone? I am embarking this journey in my new workplace and would perhaps some knowledge share from you on what went well, not so well, what would you do differently.
  • Hi Claire,

    We are not a very large organisation (175 headcount), therefore it may not be as detailed as larger organisations. I don't want to create a monster of a project and ultimately want the end result to be simple and straightforward as well. It's also my first time carrying this out!
    I need to start with the basics so initially I am working with the management team and staff to have clear job descriptions as a starting point. Part of this is that we now have values within the organisation that are used as part of a competency framework depending on the role and these are being used in the evaluation and part of our appraisal process (also very new to the company).
    Once I have those completed, I plan to use a very simple point factor rating, including the value level of the role, their level of supervision of other staff and their responsibility in the role (defined to allow for those stand alone specialist roles). These will then provide scores for each role.
    Once I have this information (and will work with a small team of staff and managers to score this), I can then look at how this fits into bands across the business and how many we need. Following this, we can look at the pay grading options within the bands so that people can see progression opportunities linked to their role. This will involve looking at current salaries, benchmarking and affordability for us as a business. As we have very specific areas of the business (sales, warehouse, office), we will have to consider how this will impact when we apply salary to these bands and may need separate ones for each area.
    Let me know if you want to have a chat about this further.
  • Hi Olenka - can you see my reply to Claire?
  • Good to see so many people here contributing for the first time. Welcome!