A pay range exists whenever two or more rates are paid to employees in the same job.
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Add this document to collection(s)You can add this document to your study collection(s) Sign in Available only to authorized users Add this document to savedYou can add this document to your saved list Sign in Available only to authorized users As small businesses compete for talent, it’s critical that they establish salary ranges for their positions. In the absence of salary ranges, an employer might miss out on top-quality candidates or might overpay new hires. Since February 2021, the average pay for U.S. workers has been more than $30 per hour and varies depending on where you are in the country. Does that number seem too high or too low for your small business? Maybe. Maybe not. Coming up with a salary range for each position at your small business can take some of the guesswork out of setting the appropriate pay for your employees, helping your business attract and retain workers—and ensuring your business is properly allocating its payroll. Key Takeaways
What Is a Salary Range?A salary range establishes a minimum and maximum amount of pay for a position or group of positions. For instance, if you’re hiring an inside sales representative, the low end of the range might be $35,000 a year while the high end of the range might be $65,000 a year. Use Market Research To Determine Pay RangesThe web is chock-full of information about pay ranges. So before you post a job ad, scour the internet to find examples of pay ranges for positions you’re trying to fill. NoteThe website of the U.S. Bureau of Labor Statistics is a great source in the hunt for pay ranges. Other good sources include the Robert Half staffing company, Salary.com, Glassdoor, Payscale, Indeed, SalaryExpert, and the job postings of your competitors. Data you pull from online sources can be incredibly insightful when you’re establishing salary ranges for your small business. Compare Salary Ranges Throughout Your CompanyAs you’re determining the salary range for a certain position at your company, you might want to review the pay ranges for every position. For example, you might realize you need to increase the salary range for a job posting if your internal research shows your current employees are being paid above that range. Or you might determine that your current employees are being underpaid based on your salary review. During this process, figure out whether your budget can withstand changes in salary ranges that result in higher payroll costs. You might conclude that your budget needs to be increased to fatten your salary ranges, or that you can’t afford to boost the budget in order to tweak salary ranges. Competitive and budgetary concerns are two of the factors that will affect your salary decisions. Calculate a Salary RangeTo calculate a salary range, factors you should weigh include:
Clearly Communicate Salary RangesWhen it comes to salary ranges, it’s wise to communicate them either in a job posting or during the interview process instead of later on, during salary negotiations. NoteAlso, it’s best to be proactive about setting salary ranges rather than establishing them after a sticky issue arises, such as an increased turnover rate or a pay-related lawsuit. However, this doesn’t mean you must widely broadcast salary ranges for each position at your company. But being transparent about a position’s salary range with a prospective or current employee can help attract and retain talent. Use the Salary Range To Attract the Right EmployeeThe salary range might be the first thing a candidate looks for in a job posting. In fact, if a salary range doesn’t appear in a job posting, a candidate might not even submit an application. Therefore, it might pay off in terms of attracting and retaining the right employees to include the salary range in a job posting. In some places, state or local laws require an employer to add a salary range to a job posting. Be sure to check the labor laws governing your small business before you publish an ad for a job. Why Should You Advertise the Salary Range?Here are five things that putting a salary range in a job posting can do:
Clarify Your Needs With the Job DescriptionBeing as specific as possible in a job description, such as mentioning the salary range, can generate more candidates who are well-qualified for the position you’re trying to fill. For instance, if you’re looking for an inside sales representative, a detailed job description might discourage someone with no experience related to inside sales (such as somebody who has specialized in outside sales) from applying for the job. This can save time and frustration for both you and a job seeker. NoteOnce you’ve nailed down the specifics of a position you want to fill, you can more easily research what the salary range should be and can more precisely target potential employees. The Bottom LineSetting salary ranges for positions at your small business means you’ve got to conduct market research and review your business’s budget and priorities. But if you commit to establishing a pay range for each position, that work could pay off in the form of more job applicants, better-qualified job candidates, less turnover, and a happier workforce. Frequently Asked Questions (FAQs)How big of a salary range should I give during the interview process?During the interview process, ask a candidate about the salary they’re expecting. If the number is within your salary range for that position, then tell that candidate that their figure falls within your range. You can dive into the details once you’ve reached the salary negotiation stage. Of course, the salary conversation might not require this sort of back and forth if the job posting included the pay range. What is median pay for an American worker?The median wages for U.S. workers was $1,041 per week in the second quarter of 2022, according to the U.S. Bureau of Labor Statistics. What is the pay structure?A pay structure can be defined as a collection of wage grades, bands or levels that link related jobs within a hierarchy or series.
What is the term for rates of pay that are above the pay range maximum quizlet?Wages paid above the range maximum are called blue square rates.
How fair the job's pay rate is when compared to other jobs within the same company?Internal equity refers to how a job's pay rate is checked to see the equity part of a company. When the job's pay rate is compared with other jobs inside the company, whether it is equitable or not can be identified. If the job's pay rate is found equitable and fair, it means internal equity exists in that company.
What is a survey what purpose does it serve in terms of compensation?A salary survey is a research study that collects and analyzes data on wages and salaries. The purpose of a salary survey is to help employers and employees understand what different jobs pay in different geographic areas, and to identify trends in wage and salary levels.
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