Compensation Help - Salary Ranges

Hello! I am working on putting together a compensation plan for my organization. Right now, we do not have salary ranges, caps, annual raise budgets, etc. 


Can anyone share how they have established any or all of these policies?

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  • Hi there!  That's a pretty big undertaking. With the orgs I've worked with, I did a market analysis to determine appropriate salary ranges for each position in our market. There are actually some decent websites that are free, but it's hard to really say how accurate they are. Some are employee/candidate-reported. Still useful to give you some idea. You may even have some benchmarking data available to you in your specific market/region. As an example, here in Colorado we have the Employer's Council. As a member, we have access to their annual compensation and benefits survey and results - which gives us employer-reported salary and benefits information for other employers in our state (as well as neighboring states).  This information is incredibly valuable!!! We have access to a HUGE book of positions/titles and job summaries so that even if our titles don't match up, we can get a general idea based upon the job function. Plus, it even breaks down to org size and industry (healthcare, manufacturing, public employer, etc.).  And you can evaluate the past surveys to determine the trend for salary increases (i.e., 3%, 4.5%, etc.).

    Also, let's not forget that SHRM has a benchmarking service, as well. Here's the link:

    I also would look at current trends - such as unemployment in your area and industry - as that would have some bearing on caps, increases, COLA, etc.  As an example, in Colorado, we have crazy low unemployment. Way more jobs than we have candidates to fill - especially in certain industries. As a result, salaries are higher and benefits are more robust as a way to attract and retain high quality candidates.

    You need to also consider your specific industry and the key qualifications/skills necessary for each position to be successful in your business.  You can survey your people for this information... Keep in mind you want to be looking forward - so you need to evaluate the qualifications and skills that you WILL need to continue to be successful and relevant, and what impact that may have on your comp and benefits structure.

    Once you have all of this data compiled, you have to make sense out of it, and then roll it into your comp plan. 

    I would be willing to bet that you can find a few examples out on the interwebs that you can use as a template. I bet you could also find some useful resources through SHRM or Amazon to help you from start to finish.  In the end, your plan will be very specific to your organization, it's growth and needs.

    Hope this helps!

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  • This is pretty simple if you have market data specific to your industry.  Search to see if you can some survey information.   You will find you are overpaying, underpaying or just right.  You will need to compare the "core" duties to make sure that the survey information matches.  I would be happy to share I sheet i have used in the past as a template.  The survey's will not match every position, but internally you will need to lump all "like" job responsibilities together, there you will be able to see the levels you have an need.  Match to the survey, and it is the beginning of your salary ranges.  The other part is to understand the hiring philosophy.   One of my companies matched the data at the  50% and another was at 75% of the range and then I was able to set my salary grades from there.  It is important also to consider the duration of the employee's employment.  Someone who has been with the company 20 years, should be at the top of the range verses someone just hired and new to the industry.

    Feel free to reach out if you would like my template,

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  • Chadwick, I'm in the same position as you.  We actually took the step of purchasing compensation benchmark data from ERI last year which I highly recommend.  Their site allows you to sort by job title, but it hones in on the duties, which is what you really need to look at.  You can even create hybrid jobs; for example, our Bookkeeper does everything from Payroll to AP/AR, etc. So we created a hybrid position within ERI so that we can view the salary data for her unique position.  Same with our receptionist who does a lot of administrative work and helps with AP. 

    But I'm not exactly sure what the next step is to creating pay grades, etc.  Any insight is appreciated and I'll be following this thread in case anyone can shed light on what the next steps should look like. 

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  • Kyra Matkovich  - This response to you is way late but I wanted to say thank you! Your response was perfect and soooooo valuable. Thanks again!

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  • Misty White  - Thank you - that tool was a huge help! You rock!

  • Chadwick Klein I’m so glad! I’m always happy to assist other HR pros! Sometimes we spend too much time reinventing the wheel. It’s great to tap into the knowledge and expertise of others to help you get moving in the right direction. Feel free to reach out anytime! 

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