How it works

Implementing a salary structure transmits a powerful message to stakeholders, employees, and the talent market. The organization formally determines how much it will pay its employees based on market data, internal equity, and individual/organizational performance. This approach is both superior and opposed to organizations that determine salaries without a framework—for example, by formulating the “how much you need to accept” question to candidates—that end up creating unfair hiring and promotion practices and pay compression issues, which significantly contribute to employees’ disengagement over time.

looks_oneEstablish solid foundations for salary management across the organization

A salary structure is a mathematical representation of the organization’s hierarchy and salary guidance. Most organizations define three main reference points for their salary structure: baseline (also called minimum), target (also called midpoint), and maximum.