Understanding Pay Grade Steps

To ensure that all of the employees working in a job receive the same rate of pay, and to establish progression within a pay grade, you can set up pay grade steps. For example, you might have a pay grade A that contains pay steps A1, A2, and A3. Employees in step A1 receive 15.00 USD per hour, employees in step A2 receive 15.50 USD per hour, and employees in step A3 receive 16.00 USD per hour.

Setting up pay grade steps lets you automate the process of tracking pay information for employees. You can set up the system options so that, when you enter employee information, the system automatically calculates the employee salary or hourly rate, based on the pay grade step that you enter for the employee.

When you define pay grade steps, you can save time and reduce calculation errors by having the system automatically calculate the pay rates for a group of steps. You enter a base pay rate that applies to the group of steps, and then you enter a pay rate multiplier for each step. The system automatically calculates the rate for each step by multiplying the base pay rate by each step pay rate multiplier.

When you set up pay grade steps individually, you enter a pay rate for each pay grade step. When you set up pay grade steps using a pay rate multiplier, you enter a base pay rate and apply a pay rate multiplier to each pay grade step.

You can define pay grades at the same time that you define pay grade steps. You do not need to define pay grades by class to use the pay grade step table.

The Pay Grade Step Table program (P082003) updates the Pay Grade/Salary Range table (F082001).