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A pay structure is a method, design or basic composition of the company’s pay philosophy. It is a collection of pay rates or ranges that prevails in an organization. The main purpose of having a pay structure is to maintain a competitive pay level, recognize and reward the different levels of skills and responsibilities and to manage the company’s pay expenditure.
The pay structure of the company where I work is a combination of equity method and market pricing method. The company uses the equity method for designing pay structure or most of its employees and market pricing method for its top management and strategic positions. The company’s structure consists of ten grades, and each grade has a minimum, midpoint and maximum. These points reflect the range of pay in the market for a position in the grade.
Employees are being paid within the range of grade in which their position falls. The second method, which the company uses, is called market pricing. Under this method, employees are compensated based on the market value of their job, regardless of their level in the hierarchy in the organization.
The company’s workforce also consists of the union and contractual employees. Therefore, company outsources compensation of the contractual employees to a third party and use market pricing for the unionized employees. The goal of the company’s pay structure is to maintain a competitive compensation with the market to attract and retain the best talent while providing its employees with more clarity about career advancements. The pay structure at the company is very fair and reasonable. The company is not one of the best paymasters in the industry, but the low pay is easily compensated by other attributes.
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Good Course Work On Human Resource Management. Free Essay Examples - WowEssays.com. https://www.wowessays.com/free-samples/good-course-work-on-human-resource-management/. Published May 19, 2021. Accessed June 16, 2021.