Salary Survey Dilemma: How Do You Determine New Salary Ranges?

Sehsan
Hi everyone, I have worked on a salary survey and I need to come up with new salary ranges. Can you guide me on how we generally set up the salary ranges?
vibhanshu.agnihotri
Salary ranges depend on various factors, i.e., market pay for the jobs and the pay range which you will maintain based on bands in your organization. You may wish to start by obtaining the market salary data and aligning it with your level bands in the organization. Then, decide on the percentile you want to maintain for your staff compared to the market data. Additionally, you may determine the range by first finding the median pay (which should be the percentile you consider as the median from the market data) for each grade, and then finding the minimum and maximum. Normally, the range of the band is 50%, i.e., 25% below the median and 25% above the median.

Once you have the bands, check the feasibility by applying the same to your existing staff and understand the overlapping factor of salary across bands, which needs to address highly paid outliers in each band. If the existing salaries do not align well, realign your considered median and repeat the exercise. Typically, companies in IT pay salaries ranging from the 40th percentile to the 70th percentile of market pay. Again, your primary focus should be on your existing staff and not only on market pay.

Regards,
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