The Dewey Decimal System is used by libraries to organize items in their collections by subject. You can see the alpha and number coding on the spines of books as you look for the item you want on the shelves in the library.

What does this have to do with pay grades?

Often, I work with employers who have pay grade labels that are “smart.” In other words, there is logic within the pay grade label that aligns to the job family, geo differential, salaried vs. hourly, certification/education requirements, incentive target, and other factors.

This “smart logic” in the pay grade label causes it to look like the Dewey Decimal System. Example: Pay Grade = 118.001.S.P5.A

Years ago, I partnered with a large (more than 50k employee) healthcare organization to simplify their pay grades prior to the implementation of Workday. How complex was their current pay grade approach?

· The employer had more than 2,665 grades with 309 unique midpoints.

· One grade had 200 variations or different midpoints.

I developed two simpler alternatives. One with 300 grades and another with less than 100 grades.

How did I do it?

I asked a lot of questions and found out that they had other fields in the HR system that captured the “smart logic” or job family, geo differential, etc.

And I took that “smart logic” out of the pay grade label because there was no need to have that when it was already captured and maintained in other fields.

I am not a fan of making pay grade labels smart. Instead, I focus on pay grade labels and compensation structures that are simple and that can grow as the employer grows.

Tell me about your pay grade or salary structure nightmare that you simplified.

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