How to Develop Salary Scale
Salary scale consists of range of salaries, which serves as a guideline for salary payout to different levels of employees.
The following are the steps of developing salary scale:
1. Establish Job Description
- A standard format of job description which include a description of the field of responsibilities as well as a listing of duties under one or more areas of responsibilities shall be developed.
2. Analysis of Job Categories
- Once Job Description is done, the next step is to analyse all the positions and try to categorise them into groups. It could be by level, e.g. non-executive, junior executive, senior executive, etc; or by job grading, e.g. E1-E2 for Senior Manager level, E3-E4 for Manager level, E5 for Middle Management level, etc.
3. Determine Salary Scale for Each Job Categories
- It could be done by performing salary benchmarking within the market, and work out the salary scale by setting the minimum, median, or maximum salaries.
4. Determine where an employee would fall within the salary scales. The following are some guides for this purpose:
a. Minimum Salary - This is the entry level for the given portfolio, which means the person filfills the minimum requirements for the job.
b. Salary between Minimum and Median - The employee has the experience and knowledge to master most of the duties related to the job in an independent manner. The employees in this category are in the development phase because they are still learning their job.
c. Salary between Median and Maximum - The employee is highly experienced and their level of productivity exceeds the job requirements. The employees in this category are in maturity phase because they are mastering their job.
d. Maximum Salary - The employee is continuously producing results that are well above the requirements of the job. The employees in this category are in the leadership phase because they have demonstrated superior leadership skills and a strong commitment to the organisation. They could propably move into the next level of job category.
