Job

Grades

&

Salary

RangesCompa-ratios(CR)acompa-ratio(comparativeratio)isameasureoftheextentwhichtheaveragesalariesinagradedeviatefromthetargetsalary.itisusedtocompareactualaverageswiththetargetsalarytoindicatetheextentwhichsalarylevelsarehighorlow.theformulaforcalculatingacompa-ratiois:Averageofallsalariesinthegrade-------------------------------------------------------------------------------------------------------------------------------------------------------------x--

100Midpointofthesalaryrangeacompa-ratioof100indicatesthattheaveragesalaryisalignedtothemidpointofthesalarygradeandnocorrectivestepsneedtobetaken.Compa-ratios(CR)acompa-ratioof80wouldindicateaneedtoinvestigatewhyaveragesalarieswerelowandpossiblynolongercompetitive.acompa-ratioof120wouldsuggesteithertherewerealotoflong-servicestafforthatstaffwerebeingoverpaid,andthatincreasesneededtobemodified.compa-ratioanalysiscanrevealasituationwhereearningsdrifthastakenplace.CompetitivePosture(CP)CompetitivePostureisameasureofhowcompetitivethesalaryiswithrespecttoagivenmarketbenchmark.CompetitivePosturecanbeusedtomeasurethecompetitivenessofbothcompan’ys’orindividua’sl’salarycompetitivenessinthemar

ketCompetitivePostureforacompanyiscomputedas:CR=AverageofallSalariesinagivenJobGradeMarketBenchmarkSalaryCompetitivePostureforanindividualiscomputedby:CR=SalaryoftheindividualEmployeeMarketBenchmarkSalarySalaryAdministrationMinimumSalaryPoints

1.Minimumsalaryforthegrade2.MinimumforJobInthemarket3.Setcompa-ratioat1.004.Overlapbetween60%to80%5.Avoidleapfroggingtendencies6.AllowforrealisticminimumSalaryAdministrationMaximumSalary

PointsMaximum

salary

for

the

gradeMaximum

for

job

in

themarketKeepsalary

rangeshort

(8

-12

years)Maxmin

ratiobetween1.5to

2.0Setcompa-ratio

at

1.00Allowforrealistic

maximumSalary

AdministrationMinimumMinimum

salary

for

the

gradeMinimum

for

Job

In

the

marketSetcompa-ratio

at

1.00Overlap

between

60%

to

80%Avoidleapfrogging

tendenciesAllowforrealistic

minimumMaximumMaximum

salary

for

the

gradeMaximum

for

job

in

themarketKeepsalary

rangeshort

(8

-12

years)Maxmin

ratiobetween1.5to

2.0Setcompa-ratio

at

1.00Allowforrealistic

maximumMinimumAndMaximumPointsStreamliningofSalary

Ranges

(Executives)Effective

1January1995*Mosttypicalvalue

corresponds

to

the

working

midpoint

of

therange@

Derived

from

annual

base

salary#

Dispersionfactorof

+/

-25%around

Q1

valuesJobReference

LevelsThereference

job description

preparedto

assistnon-hay

evaluatedcompanies

with

jobmatching,areeachevaluatedandqualityassuredagainstHay’sstandards.Theevaluationsarethen

slotted

intothe

relevantjobunitrange

whichforms

thereferencelevels.Thesereferencelevelsandcorresponding

job

unitranges

are

now

standard

throughoutallHay’smainremuneration

surveys

and

aredetailed

below.JobReference

LevelsSalary

AdministrationDeterminingEntry

Salary1.Market

value2.Candidate'sexistingsalary3.Basic

qualifications4.Additional

qualifications5.Relevantworkingexperience6.Relatedworkingexperience7.Completion

of

national

service8.Geographicallocation

ofcompany9.Nature

of

industry

(dirty

orhazardous)10.Minimumsalaryforjobgrade11.Salaries

ofexisting

incumbents12.Re-grossingannualsalaryIncrementalSystemsIncrementalsystemsvaryfrom

rigidprocedureswithfixed

and

predeterminedmovements

throughascale

related

toage,

serviceinthecompanyorservicein

the

job,toflexiblesystemswhere

managementexercisescompletediscretion

overtheaward

and

size

ofincrementswithoutanyguidelines.Betweenthetwoextremes

thereis

amiddleground

of

semi-flexiblesystems.Fixed

scaleswith

automaticprogressionwhereindividuals

move

through

jobsor

gradesbypredetermined

stepsrelatedtoageorservice,thesecould

berate

for

age

scales.Fixedscales

are

criticized

because

they

do

not

giveenough

incentiveto

effort

and

the

improvementofperformance-promotion

mightonlybeanawardinthelongerterm,

ifatall.They

are

defended

becausetheycanbe

operatedwithcomplete

impartiality-manypeople,especiallycivilservants,questionthepossibilityofdetermininga

fairrelationshipbetweenmerit

and

rewardwhere

theonlymethod

of

measurementisthesubjectiveopinionof

someone’sboss.Incremental

SystemsFixed

scales

with

limited

flexibilitywhere

it

ispossibleto

givedoubleor

even

triple

increments

tohighflyersand

withhold

increments

forpoorperformers.Semi-

fixed

scaleswhich

allowautomaticprogression

to

a

‘merit

ba’ra’

t

whichprogression

for

some

people

maystop

while

othercanadvance

at

differentratesaccording

toperformance.Fixed

parallelscaleswhich

allow

for

the

exerciseofmore

managerial

discretion

by

providing

differentpatternsof

incrementalprogression

for

differentlevels

of

performance,as

shown

in

figure10.Incremental

SystemsVariable

progressionwith

guidelineswhere

there

areno

fixed

incremental

points,

butmanagers

are

givenmore

or

less

mandatoryinstructions

on

how

theyshould

exercise

their

discretion.Theminimumguidelines

inthis

system

nay

consistofthe

annual increments

thatcan

beawardedfordifferentlevelsof

performance.

These

may

beextended

inmore

rigid

systems

togive

theproportionof

staff

who

should

receiveagivenincrement.Variable

progressionin

range

without

guidelineswhere

management

discretionintheaward

of

increments

and

thedeterminationoftheir

sizetends

to

be

restricted

onlybythemaximumof

thesalaryrangeand

thebudgettheyare

allowed

forsalaryincreases.Incremental

SystemsAnnualIncrementFixed

increment

systemFixed$Fixed%Variable

increment

systemFixedvariableFixedPlus

(merit

increment)Flexible

increment

system-

Fixedcomponent

+

flexiblecomponentMatrixsystem-

Salary

quadrant

vs.performance

matrixSalaryProgression

CurveIncrement

vs

Performance

MatrixMarketValue

ComputationSalaryReviewGuidelinesOverallcost

guidelines

in

which

a

budget

ofx%

of

payroll

is

imposedformeritreviews.This

is

the

essential

guideline,

and

managersmay

be

left

to

distribute

thepool

asthey

please,orsubject

tovariousdegrees

of

control.Guidelines