I am working with an employer that has about 200 employees in the U.S. and Canada. We are market pricing their jobs and developing pay grade structures.

One set of pay grades will be aligned to the 50th percentile of the external market.

The other set of pay grades will be aligned to the 75th percentile of the external market for their mission critical (competitive advantage, business imperative) jobs.

And yes, they want to have geographic differentials as well.

It is easy to start with just one set of pay grades and then find reasons to create more.

But I like fewer pay grade structures because I don’t think the additional complexity is worth it for many employers.

And with the focus on pay transparency and pay equity these days, I don’t know that small differences based on work location really need to be embedded in pay grade ranges.

Of course, it depends on the number of pay grades you have, type of jobs, range spread, business goals/context, etc.

Are you developing fewer pay grade structures rather than more?

Being able to explain why you pay what you pay is more important than ever.

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