Question

As compensation managers, why would we bother with various pay grades and pay ranges in an organization?

Answer 1

Compensation managers are responsible for the pay structure of any company. They bother to pay grades and pay ranges. Pay grade includes basic pay and grade pay which a company offers to the employees based on their qualification and experiences. On the other hand, the pay range or salary range indicates the payment for a particular position at a certain level within the organization. Salary range varies with the variation of posts. It also changes along with the performances, experiences. The salary range must have a minimum point, middle point and maximum point of the scale.
Compensation managers determine which employees deserve what amount of salary. The research, establish and maintain employee’s salary structure. They collect data and information from analytics and survey reports about the salary structure of rival organizations. After that, they establish salary structures for different posts within the organization.
Not only has the establishment of the salary structure, but compensation managers also evolved competitive wage rates when change is necessary. They oversee the distribution of pay to the workers. It is essential to maintain the operating budget within the organization’s budget, which is monitored by the compensation manager. They also discuss with the operational managers about any employee on their developmental aspects for promotions. A compensation manager also performs the role of employee retention.