I’m writing a Job Leveling Guide for a client today. It is a document that defines the different levels of jobs that an employer has employees performing.

There are usually 3 - 4 types of jobs like Support, Professional, and Management. For larger employers, you may have Executive level jobs (VP and above) as well.

After the Job Leveling Guide is written, it is used to assign a Job Level to each job. And that along with a Job Family (think Sales, Marketing, Operations, Finance, HR, Legal, etc.) is used to support career development discussions.

The pay grade on the other hand is assigned to jobs based on a comparison of the employer’s job description to the description in a salary survey. The market data from the salary survey is then used to assign a pay grade to the job.

The pay grade provides a base salary range that is aligned to what the external market or what other competitors for talent are paying for substantially similar work.

The Job Level is assigned to a job based on an internal equity comparison.

Having these two things, internal equity, and external market, separate provides more flexibility for employers.

In other words, pay grades aren’t also used to recognize internal equity. For example, not all Directors are in the same pay grade, but they would all have the same Job Level.

It’s an approach that I use in Job Architecture projects, and it is simple, flexible, and assists managers, employees, and HR by providing a common language that supports competitive pay decisions and career development discussions.

How are pay grades used at your employer? (A) Grades are used for both internal equity and the external market. (B) Grades are for external market (competitive pay) and internal equity is separate and recognized with Job Levels. (C) Geez. You’re such a comp nerd. I have no idea.

#compensation #rewards #humanresources #internalequity #grades