Effective pay structures offer employees a framework for progression and can help to encourage appropriate behaviours and high performance. As part of a reward strategy, a successful pay structure will be transparent, fair and flexible, and most effectual when it aligns with the organisation’s strategy and its values.
This factsheet explores the purpose of pay structures and offers an introduction to the commonly used types, including individual pay ranges, broadbanding, pay spines and job families. It takes a closer look at the issues HR professionals need to consider when designing pay structures, such as red circling or avoiding discrimination. Finally, it covers local pay structures, identifying the main approaches to local pay differentiation.