Understanding the Base Pay Structure Module

Base pay structures consist of a series of pay ranges or grades, each with a minimum and maximum value. Most organizations group job codes together into job classes, and then assign those job classes to pay structures. Organizations base these decisions on data from external compensation surveys, as well as their own internal criteria. Companies develop pay structures to support and reinforce their overall compensation strategy, as well as their compensation strategy for specific job codes. For example, a organization's overall compensation strategy might be to pay most of its workers at about the 40th percentile of the market. However, for job codes with essential technological or managerial skills, it might pay at the 80th percentile of the market. Companies also use pay structures to communicate pay range opportunity to employees, job candidates, and managers.

The Rewards Base Pay Structure module provides the tools to organize and automate the pay structure development process, so you can:

• Design, analyze, and revise multiple versions of multiple pay structures, including those from your HRMS system.

• Use the target rates from the Market Compensation module to build and evaluate new pay structures, in alignment with your compensation strategy.

• Compare the new structures to current workforce compensation.

• Select for approval the pay structures you prefer, and publish the results of your pay structure decisions.

Base Pay Structure Business Process

Image: Base Pay Structure business process

The following diagram outlines the main steps in the Base Pay Structure business process.