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Can we use standard pay scales in the form of a regressed market for remuneration management?

We do not recommend this approach. When implementing pay-scales/ranges the company needs to ensure that the pay-scales fits the company’s operational requirements as well as ensure alignment to the company’s remuneration policy, philosophy and positioning in the market. The following should be considered –

A. Pay Element

  • Basic vs Total Guaranteed Package.

B. Position in market

  • Lead vs match vs lead-match approach – How competitive the company would like to be bearing in mind the cost implications.
  • Projection of the market data and age correction of market data.

C. Reference point

  • Market Positioning/Pay policy line – Market 50th Percentile as reference point

D. How many pay scales?

  • Different target markets – National or Industry Specific;
  • Diversity of jobs – Functional areas or Job levels;
  • Diversity of grading procedure – Bargaining Unit levels;
  • Internal equity vs external competitiveness – Separate pay scales developed for certain skills, professions, key skills, core, critical skills, specialised etc.; and
  • Organisational Structure – Pay scales or holding company vs per business units

E. Type of pay scales

  • Grade-Based;
  • Job-Based; or
  • Job Family Grade Based.

F. Range Spread

  • Range spread (minimum to maximum);
  • Midpoint-to-midpoint differential;
  • Slope / Gradient; and
  • Midpoint-to-midpoint differential (slope/gradient)

G. Range overlap

  • It is common practice to have range overlap to provide sufficient progression within a range.

For more information or expert opinion visit:

Market Positioning and Pay Scale Design