OL 600 Why might an organization choose to have a pay structure different from their competition PDF

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Professor asked why an organization would have a different pay structure from competitors and who and why they take place, and examples and explanations given. reply to her question...

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OL 600 Why might an organization choose to have a pay structure different from their competition? 4-1

Generally, companies employ two types of salary structures – Traditional and Broadband salary structures. Let’s look at each of these in detail. Traditional Salary Structures In a traditional salary structure, many pay ranges are depending on the nature of a position. Therefore, the new employee generally starts at the bottom of the pay range. He/she will then move up the range over time based on his/her performance appraisal. Companies using traditional salary structures have many pay ranges depending on the nature of each position. In addition, this salary structure provides a hierarchy system in the organization allowing employees to be promoted from one pay grade to another. Broadband Salary Structures Broadband salary structures are more flexible with fewer bands and wider salary ranges. As a result, broadband salary structures are often used in flatter organizations with fewer levels or smaller companies. In broadband salary structures, the emphasis tends to be placed on career development rather than a job promotion. Salary structures are a necessary part of effective management. They help make sure that the pay levels are externally competitive and internally fair. Salary structures also allow companies to reward performance and development while controlling cost. In addition, well-designed salary structures will attract highly skilled people to your company and keep them motivated within the organization. (BC Jobs 2014).

A location such as a long-term care facility. One in the city may pay less because there is public transportation. Also, knowing the population in the city may be less likely to own a car—more competition for entry-level jobs due to the density of population. Rural centers may pay more because of the cost to drive to the health care center. However, many pay less as the only facility in the town, and people do not want to drive in the larger city with traffic. Companies with a bad reputation may pay more to bring in more people to work there and bypass the reputation. Kimberley Reference BC Jobs. (2014 January 26) Why Fair Salary Structures is Important | BCJobs.ca...