NRC: Job grades, job evaluation, and Jobscore.
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Page 12

If differentials between grades are too wide, say more than 25 per cent, it would be difficult to justify a move to a higher grade for most jobs, even though some upward movement may be appropriate. The only area where steps as wide as 25 per cent may be applicable is at the very highest levels in an organisation, say between the most senior position and the second level, and between the second and third levels.

1.3.1 Determining the Grade Salary Range (Band Width).

Each grade has a width in terms of catering for a range of job sizes (grade width), and a corresponding range of salaries referred to as the grade's salary band width.

Considerations for determining the number and width of grades are discussed in Section 1.3 above. The width of a grade is defined in terms of the span of job evaluation points it covers, for example:

Grade 1Grade 2Grade 3Grade 4Grade 5
154 - 191192 - 239240 - 299300 - 374375 - 486

Job Points Ranges

Each grades can be the same width, however it is more likely that individual grades are of differing widths, become wider as the grade increases. In the above example, each grade is successively 25% wider (the midpoint job evaluation of each grade is 25 per cent higher than its predecessor).

While the width of the grade specifies which jobs would fall into the grade because of their job evaluation points, width does not specify explicitly what salary level or range applies to the grade. The single salary level for each grade, or where applicable the salary range, adds a second dimension to the model.

Each grade must have a salary level associated with it. This salary becomes the underlying salary for all jobs in the grade. Such salaries are determined from market surveys, and the translation of salary levels from surveys into the grade structure is addressed in Section 1.3.2.

It may be that there is a single salary applicable to all positions and all employees in the grade (and this can be true in non pay-for-performance environments). In this case the above diagram may be presented as follows, where a single salary level for each grade is shown:

Table 1.3.1
Grade Salary Level
($) p.a.
Points Range154 - 191192 - 239240 - 299300 - 374375 - 486

Many organisations would have a range of salaries applicable to a grade to reward growth and advancement of employees in the grade. Hence, for each grade, there would be a range of salaries extending above and below the 'mid-point' or single rate salary for the grade. How wide should this range be is the next question.

The wider the grade, i.e. the bigger the range of job sizes it contains, the bigger the spread of salaries that can be justified. However, the underlying purpose of a range of salaries for a grade is to enable an individual's pay within a grade to move in relation to the their performance in the job. [Necessarily therefore, an adequate performance appraisal mechanism is also needed (see Section 2.0 for a brief introduction to paying for performance).]

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Copyright 2004 National Remuneration Centre, Melbourne.