Segal Company

Salary Structure

Salary structures provide a framework for organizations to manage employee base salaries. A salary range within the pay structure typically encompasses a particular grouping of jobs (e.g., jobs with similar job responsibilities and levels, employee skill sets, strategic importance to organization). The pay levels associated with the salary ranges (e.g., minimum, midpoint, and maximums) are developed based upon the organization's overall compensation strategy and pay positioning.

Common issues:

  • How do we strike a balance between enforcing the structure and allowing for flexibility?
  • Many of our employees are currently above the maximum of their salary range because the existing salary range does not provide enough room for them to grow. How can we solve this problem?

Sibson helps companies with the following:

Understand different salary structure alternatives: Sibson helps organizations understand the various types of salary structures and the implications of specific alternatives, and helps them determine which alternative aligns best with the organization's strategic objectives. This process includes detailed explanations of key design features, objectives, and the outcomes associated with each structure.

Develop salary ranges: Once a structure design is determined, Sibson works with organizations to develop the pay levels associated with the salary ranges (e.g., minimum, midpoint, and maximum) and the control mechanisms within each band. Sibson ensures that salary ranges represent the organization’s desires for internal vs. external equity, while maintaining simplicity, transparency, and flexibility.

Detail cost implications of structures: Sibson provides organizations with detailed analyses of scenarios to help them understand the impact on the organization of either moving from an old to a new structure or implementing a brand new structure (if an existing structure does not exist).