Now that you've got Comp basics down, and it's time to level up! Taking the foundational skills of 101 into consideration, 201 builds on the concepts of creating a structure by digging deeper into each necessary piece needed in order to understand how to build and maintain a compensation structure. -Ranges & Grades – what are they and which is the best scenario for you? Geo differentials–best practices, managing grade schedules -Midpoints & widths – what does this mean and what does it determine? -Structure Scenario – using a common customer scenario, we will build a structure live on the call -Job levels/Job familiars – how to make adjustments to alignment and slot jobs

1. Compensation 201

2. Krystal Praast
Compensation Professional
Michaela Ayers
Customer Training Specialist

3. www.payscale.com
• Introduction
• Foundations of Market Analysis
• Ranges VS Grades
• Structure build scenario
Agenda

4. PayScale Collects and Analyzes the Largest Database of Salary
Profiles in the World

5. Compensation Foundations

6. www.payscale.com
Pay Philosophy
Jobs matched
Labor markets
defined
Pay
Philosophy
Executive buy
in

7. www.payscale.com
How competitively do you want to pay?
What’s your target market percentile?
50TH
PERCENTILE
LAG THE MARKET
MEET THE
MARKET LEAD THE MARKET
90TH
PERCENTILE
10TH
PERCENTILE

8. www.payscale.com
Workforce Segmentation
Industry: IT Services
Size: 400 EEs
Location: Seattle, WA
ONE-STRATEGY-FITS-ALL SEGMENTED WORKFORCE
HR IT
SALESOPS
Industry: IT Services
Size: 400 EEs
Location: Seattle, WA
HR
OPS SALES
Industry: IT Services
Size: 10,000 EEs
Location: Seattle, WA
IT

9. www.payscale.com
Components of a Base Pay Structure
STRATEGY
Labor Market + Target Market Percentile = Compensation Strategy
Benchmark Job + Compensation Strategy = Market Data
STRUCTURE
Market Data + Internal Alignment = Base Pay Structure

10. Ranges & Grades

11. www.payscale.com
Using Pay Ranges
Range MidpointMinimum Maximum
$50,300 $74,400$62,400
Range Midpoint:Range Minimum: Range Maximum:
• Employees new to the role
• Employees with lower
performance or proficiency
• Employees proficient in their role
• Employees with good performance
• Aligns with the market
• Employees with high performance
• Employees with demonstrated
high proficiency and experience

12. www.payscale.com
Definition:
Job-Based Ranges
Ranges are built around the market value for the job, at the targeted percentile

13. www.payscale.com
Definition:
Grade-Based Ranges
Jobs with similar level of responsibility and value to the organization
are grouped together in a grade

14. Assigning Grades
Match market value with nearest
midpoint
Adjust for internal
alignment

15. www.payscale.com
Grade Assignments Example

16. Geographically-Based Schedules
TAMPA
Schedule A:
-5%
PHILADELPHI
A
Schedule C:
+5%
PORTLAND
Schedule B:
(Main)
Purpose:
Preserve both
competitive pay
to the local
market and
internal equity

17. www.payscale.com
How do we use
Pay Schedules?
Grade assignment is the same across all locations
Range is different based on the pay schedule
JOB GRADE
ASSIGNMEN
T
SCHEDULE A
Tampa, FL
-5%
SCHEDULE B
Portland, OR
Main
SCHEDULE C
Philadelphia,
PA
+5%
Receptionist 1 $10.25 -
$13.25
$10.75 -
$14.00
$11.25 -
$14.75
Admin Assistant 2 $11.50 -
$15.00
$12.00 -
$16.00
$12.75 -
$16.75
Order
Coordinator
3 $12.75 -
$17.00
$13.50 -
$18.00
$14.25 -
$19.00

18. www.payscale.com
How many
jobs do
you have?
Which
scenario
will work
best for
you?
Do you
have
positions
in multiple
locations?

19. Structure Scenario
Clinical Jobs
o Dentist’s Office
o 3,000 Employees
o Local Markets
Corporate Jobs
o All industries average
o 3,000 Employees
o Local Markets
Competitive Positioning: 75th Percentile

20. www.payscale.com
Comp Plan Benefits
Business Alignment:
• Business goals guide compensation strategy decisions
Internal/External Equity:
• Clarifies market and internal value for each job
• Provides a way to manage EE pay effectively
Communication:
• Creates a tool for managers to talk with EEs about development
• Provides room to reward EEs based on performance, experience, etc.
Confidence:
• Quantifies compensation costs and helps with budgeting
• Gives all EEs confidence that pay decisions are fact-based

21. www.payscale.com
Rita Patterson, CCP
Manager, Customer Education
https://www.linkedin.com/in/rita-patterson-ccp-5b039812
Mykkah Herner, MA, CCP
Modern Comp Evangelist
https://www.linkedin.com/in/mykkahherner
First thing1
2 Second thing
3 Third thing
Questions?