The introduction of job grades and/ or bands in an organization that will become the framework of an orgnization's salary structure needs many pre-requisites. It is something that is better left in the hands of professionals like us who has been doing it for a long time. Simply copying certain models (like the one given above) will not be a good help because it opens to so many questions that must be answered. It can also create problems for the organization, that can cause your job because compensation is a very sensitive subject matter. This is where your competence and/ or incompetence can be uncovered.
Hence, if your organization really needs it, then allocate a budget and call the professionals.
Offhand, however, let me say the following:
1. Job Grades and Bands are not simply designed out of nothing. Whatever you will design will mean cost for the company. Hence, you need to understand the four basic compensation principles of: internal equity, external competitiveness, affordability, and sustainability.
If you are a new company, you need the owners pay philosophy and policy to be able to create a good and acceptable salary structure for them. If you are already operating, then you need the latest payroll list to be able to see and plot the current salary ranges of the different job classes in your organization, ie. the executive, managerial, supervisory, staff, clerical, and admin support personnel.
2. Each Job Grade or Band must have the following elements: minimum rate, median rate, and maximum rate. These rates must be properly benchmarked with the curent industry market where the company belongs so your pay will be competitive (external competitiveness). The rate ranges in each grade or band must be so designed that overlaps are rational and distortion is avoided at all times. Overlaps are to be observed according to the basic theories we learned in the textbooks.
3. The entire salary structure must be designed in such a way that it is not only affordable to the company, but is also sustainable by it for the long term (3rd & 4th principles).
I suggest that you attend a HayGroup or Watson Wyatt workshop on this subject matter.
Ed Llarena, Jr.
tel: 00966-54-223-7804 (ksa)
22nd February 2010 From Philippines, Parañaque