Confused About Salary Scale vs. Salary Structure? Need Help for University Project!

Hello!

I do have a project in university. It's about Salary Scale, and how to do it. First, does 'Salary Scale' mean 'Salary Structure'? I am not finding any info on the net concerning this subject, although I tried many synonyms: pay scale, etc. Any idea? Any documents, info, PowerPoint to share? :S

Thank you! Have a nice day :)

Hi,

If you want salary structure details for different sectors, you might find help on the Kelly Salary Survey site. It's not really clear what you require, but I hope the Kelley site helps :)

Hello! I do have a project in university. It's about Salary Scale and how to do it. First, does 'Salary Scale' mean 'Salary Structure'? I am not finding any info on the net concerning this subject, although I tried many synonyms like pay scale. Any idea? Any documents, info, PowerPoint to share? :S Thank you! Have a nice day :)

Hi,

The salary structure consists of various components such as Basic, HRA, Conveyance Allowance, Special Allowance, etc.

Some of the components are subject to government laws. For instance, in Class A cities, HRA should be 50% of Basic, whereas in Class B cities, it is 40%. If the conveyance allowance exceeds Rs. 800, it becomes taxable.

I suggest referring to some good books on company laws and searching for relevant links on company laws.

Regards,
Mithun Gupta

Hi dear,

I am looking for information on the salary scale terminology used in government offices and the salary structures utilized in corporate companies, whether private or public sector. Additionally, these entities also refer to the term compensation structure.

Best regards,
Bhagwan Tolani
Sr. HR
TM Group
Email: bhagwan_007@in.com

Hello!

I have a university project on Salary Scale and how to establish it. Does 'Salary Scale' refer to 'Salary Structure'? I have been unable to find relevant information online despite trying various synonyms like pay scale. Do you have any ideas or documents, information, or PowerPoint presentations to share?

Thank you!
Have a nice day!

Dear Raykazan,

Salary scale, to me, is closely related to a group of roles/functions and is based on grading the upper and lower limits of the salary paid.

It can also be related to job value or the cost of the job. Suppose there is a need for a new team member in a team that performs a certain function. In that case, we will have to collate data about the existing team members based on:

1) Qualifications
2) Years of total work experience
3) Relevant work experience

Once we have categorized the members, we obtain data on the employee cost. For example:

- A BE with 3 years of experience falls under the bracket of 3 lac.
- A Diploma in Engineering with 7 years of experience is in the bracket with 2.5 lac.

Gradually, a defined structure will emerge, and then you can create bands and grading for each skill with combinations.

This process will assist in costing the job, and when you need to hire a new member, you can easily compare the selected person to make an offer.

In large organizations that have established rigid salary structures based on such grades, they follow what we call the "Salary scale," as seen in government jobs.

In these cases, jobs are graded, and the basic salary is fixed at different levels, which we refer to as a salary scale. These deal only with the basic salary, as the Dearness Allowance (DA) and other emoluments are a fixed percentage for the employee.

In the private sector, we have salary bands and grading used for comparison when making an offer or comparing the salary with the skill set or qualification. This is also utilized for making corrections in salary or increments for employees.

Hi,

I think salary scale refers to the different categories, levels, positions, or groupings of salary. For example, from officers to managers, managers to directors, etc.

Regards,

As per my understanding, salary/pay scale would mean the fixed salary for a particular position for the current and future years. For example, suppose your pay scale is 15000-700-900-1200, that means your salary for this year is 15000. In the following years, it will increase by 700-900-1200, respectively. In the fifth year, you will get promoted to the next position, and a new pay scale for that position will apply if you were not promoted in previous years.

Generally, the pay scale is fixed in government jobs where, regardless of your performance, you will be promoted to the next position and pay scale after completing the previous pay scale. This is one reason why government staff can be perceived as lazy.

Salary structure refers to the breakdown of your salary, including basic pay, dearness allowance (DA), house rent allowance (HRA), conveyance allowance, children education allowance (CEA), and any special allowance. Your provident fund (PF) and bonus will be based on your basic pay + DA. Gratuity will also be calculated based on your basic pay + DA at the time of retirement or resignation.

Dear,

Salary scale means the starting pay plus the yearly increment up to a certain period yearly. Then, there is an efficiency bar to qualify for the next level of salary, which then reaches the last stage. Basically, this is mostly applicable in government service where it is prescribed for each post/rank. Allowances and perks are extra.

In the private sector, it is the starting salary that one gets, which includes everything, best known as CTC (Cost to Company), and it is then broken down into various components like basic salary, HRA (House Rent Allowance), ESI (Employee State Insurance), PF (Provident Fund), transport allowance, etc.

Salary scale is a predesigned structure that we commonly observe in the government sector, universities, and PSUs. This scale is subject to regular or periodic changes, such as uniform revisions carried out periodically. Meanwhile, the salary structure is a framework developed for a specific quantum of compensation, which can be adjusted as needed. In a scale, the calculation begins from the base; on the other hand, in a structure, the total amount is determined first, and the structure is then designed accordingly. In the former case, the progression is from bottom to top, while in the latter case, it's from top to bottom.

Dear Sir,

The thing which you are talking about is technically known as Broadbanding and is also known as a progression scale. A salary structure comprises various components, viz. Basic, DA/VDA/FDA, Conveyance, and many other allowances and fringe benefits.

To arrive at a progression scale, you should ideally start with a study of the current compensation structure in your organization. Data pertaining to each and every employee in the organization needs to be clubbed together, then compute the mean, average, and standard deviation of each component for each grade across the organization. This exercise will show you the variation in each component in that particular grade. Thereafter, you should carry out a salary survey in a similar industry and logically arrive at figures being paid for each particular designation in the area.

Now, under each grade for each component, you will have the lowest and the highest figures:

Clerk - 3500 - 4000 - 4500 - 5000 - 5500 - 6000 - 6500

The progression scale is shown above, and in a similar way, you would be able to arrive at a salary progression chart for each grade in the organization.

Regards,

Avinash Singh

avinash09babbi@gmail.com

Salary scale is a grid of salaries. An organization may have different salary scales, but salary structure refers to the components of the salary such as basic, hours, DA, CA, EA, etc.

Please let me know if you need further assistance or clarification.

Hi!

Looks like there is a serious compensation terminology gap that needs clarification on this site. Indeed, it's been some time since I have seen many use the term "salary structure" to refer to "salary components", and others use the term "salary scale" to refer to "salary structure".

I don't know if we are using different dictionaries and/or different HR/Compensation reference materials. I am also wondering if dictionaries have different meanings in each continent or country.

I think HR practitioners must learn to use compensation language when discussing compensation matters, so they can understand each other better. A good source for compensation terminologies are international compensation consultants like HayGroup, Hewitt Associates, Watson Wyatt, and William Mercer. By reading their regular annual compensation survey reports for each country, you will easily grasp compensation language and terminologies.

Just for clarification, the following are the appropriate definitions of the terms mentioned above:

Salary Structure - refers to the designed "total salary range" of an organization composed of Job Grades or Bands, with each Job Grade having its own "internal range" called minimum, median, and maximum rates.

Salary component - refers to the "mix of a compensation package" typically offered to an employee during hiring. In compensation lingo, an employee's salary is generally a mix of the "base salary" and "benefits". The base salary is commonly known as the "basic pay", while the sum of base salary and benefits is referred to as "Gross Pay". Therefore, those who mention that the salary consists of base pay plus cash and non-cash benefits are actually talking about "gross pay".

There is no such thing as "salary scale" in compensation terminology. It seems to be a term used only on this site by some HR practitioners. According to Webster, a scale is "a measure characterized by marks along a line, with regular spaces in between, used for measuring" (e.g., thermometer).

I hope this clarifies things.

Wishing you happiness and good health in 2010.

Ed Llarena, Jr.

Riyadh, KSA