types of grades

8/20/2019 Types of Grades

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TYPES OF GRADE & PAY STRUCTURES

• Grade and Pay structures provide the framework for managing pay

although grade structures are increasingly used as part of non-

financial reward processes

Grade Structures

• Consist of a sequence or hierarchy of grades, bands or levels into

which jobs are placed

• arious structure e!ists for e"g #$%-$&', # ( ) %('

• Single structure with a sequence of narrow grades or relatively few

broad bands

• Grades * bands * levels can be defined in many ways or combos like+

o ob evaluation points i"e" jobs are allocated to a grade, band or

level if their job evaluation scores fall within a range or bracket

of points

o n words or designations i"e describe the characteristics of work

carried out in the jobs that are positioned in each grade or level,

define key activities, competencies, knowledge and skills

o .y reference to benchmark job or roles that have already been

placed in the grade * band * level

Pay Structures

• Provides a framework for managing pay" Grade structure becomes a

pay structure when we associate ranges and pay brackets to them"

• Contain the organi/ations0 pay ranges or scales for jobs

• 1efine the different levels of pay for jobs or group of jobs by

reference to their relative internal value as determined by job

evaluation



• Provide scope for pay progression in accordance with performance,

competence and years of service

RATIONALE FOR GRADE & PAY STRUCTURES

• Grade and Pay structures are need to provide a logically designed

framework within which an organi/ation0s pay policies can be

implemented

• 2nable the organi/ation to determine where jobs should be placed in

hierarchy, define pay levels and the scope for pay progression

• t3s a medium thru which organi/ation can communicate the career

and pay opportunities available to employees

CRTITERIA FOR GRADE & PAY STRUCTURES

• Grade and Pay structures be appropriate to the culture,

characteristics and needs of the org and employees

•

4acilitate the management of comparison, equity, fairness,consistency and transparency in managing grading and pay

• .e capable of adapting to pressure arising from market rate changes

and skill shortages

• 4acilitate operational fle!ibilities and continuous development

• Provide scope as required for rewarding performance, competence,

skills

• Clarify reward, lateral development and career opportunities

• 2nable org to e!ercise control over the implementation of pay,

policies and budgets



TYPES OF GRADE & PAY STRUCTURES

5arrow Graded * Single structure

• Consists of a sequence of job grades into which jobs of broadly

equivalent value are placed• Pay or Salary ranges are defined with $in $id 6 $a!

• Pay ranges provides scope for progression related to performance,

competencies or contribution

• 1ifferential between pay ranges are typically around 789 and there

is usually an overlap between ranges which can be as high as :89

• ;verlap provides fle!ibility to recogni/e highly e!perienced

individual at the top

• ;ne advantage is that they provide a framework for managing

relativities and for ensuring that jobs of equal value are paid equally

• 2nable the process of fi!ing of rates of pay and pay progression

practices

• 1isadvantage is if there are too many grades there will be constant

pressure for upgrading, leading to ne!t grade• <lso reinforce importance of promotion as a means of progression

.road banded pay structure

• $eans that the number of grades is compressed into a relatively

small number of much wider bands

• =ange of pay in each band is therefore wider

• obs placed in the bands purely by reference to the market rates and

job evaluation

• <dvantage is that it enables pay to be managed more fle!ibly

• Provides a role specific and performance management focus

• t dismantles the overly structured and bureaucratic approach of

multi-graded structure

• 1isadvantage could be =eliance on e!ternal relativities #market

rates', gender discrimination, women in lower region of bands

types of grades

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