compensation strategies

KKincan

Would anyone care to share their thoughts on compensation plans that utilize pay grades with incremental steps vs. negotiated salaries (in a pay band or otherwise)? I am aware that pay grades and steps are more traditionally used in the government sector as opposed to the private sector. I am wondering who has worked with both systems and may have any comments on potential resulting pay equity issues, litigation, etc. Was one system more successful for you?
Thank you!

ACU Frank

I've worked with both, and for the most part they work equally as well. What doesn't work as well are published salary ranges that are frequently ignored, subject to mass exception, etc. This also creates a secondary problem - a system that gets around the salary ranges by inventing new job titles all the time.

Sharon McKnight SPHR

I'm with Frank on this.

Either can work as long as they're structured without too much complexity and adhered to by the management team. The train definitely runs off the rails when management team members ignore the boundary requirements and make up their own salary offers.

With that said, I think grades/steps tends to work better for an hourly workforce and ranges work better with higher level positions. There is nothing wrong with utilizing both in the same organization as long as you have defined structures for both with clear guidelines for managing the plans.

Sharon