Discussion:discuss The Use Of Pay Grades And Pay Ranges And Their Relationship

Pay grades & rangesWhereas internal alignment refers to comparison of skill levels or jobs within an organization, external competitiveness refers to payment comparison between competitors. Internal alignment functions to compare the relative contributions that different jobs in an organization contribute to its overall objectives, and is focused on payment relationships that motivate employees (Fredericksenet al., 2015). This motivation is targeted at improved customer relations and general work output for individual employees that produces and increased overall efficiency. On the other hand, external competitiveness assesses payment structures of competitors to determine whether organizational pay is at par, below, or above market leaders (Ololube, 2016) . It is also aimed at developing competitive a pay package mix that ensures minimal employee turnover at an acceptable, reachable costs. Therefore, organizations determine their pay grades and ranges based on external competitiveness and in a way that achieves internal alignment. Generally, pay grades and pay ranges are a basis for determination of the applicable salary range for different job positions or ranks. These systems are easier to apply as opposed to individual job-based salary ranges, where insignificant differences in salaries exist between individual jobs. In addition, pay grades and ranges are developed based on