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Grade Relationships to Compensation and Benefits

In many enterprises there are rule based reward structures based on grade. These rules can relate grades and pay directly or indirectly.

Direct Relationship

You may have a salary administration system in which the actual level of pay normally falls between a minimum and a maximum value for a grade. Regular performance reviews and ratings can involve comparison with the mid-point value of pay for your grade. In Oracle HRMS, this is a grade rate.

Indirect Relationship

You may be using a step based system of progression points within grades, in which each point has a fixed value in a pay schedule or table. In Oracle HRMS this is a pay scale.

Relating pay to grades indirectly is common in government, education and health enterprises. It is also common in large commercial enterprises that negotiate pay levels with staff or union representatives.

See Also

Relating Pay to Grades Directly: Using Grade Rates

Relating Pay to Grades Indirectly: Using Pay Scales

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