What Are Salary Bands?
Salary bands are compensation ranges that organizations establish for specific positions to ensure fairness and competitiveness. Learn more.
Salary bands, also referred to as pay ranges or pay scales, are compensation ranges for specific job positions or roles. Salary bands define the value of each role based on both market and internal value and equity. Companies often group jobs that have similar responsibilities, skills, and qualifications into individual salary bands.
What’s the difference between salary bands and pay ranges?
The major difference between salary bands and pay ranges is that salary bands are broader and focused on groups of jobs that have similar attributes. Pay ranges are more specific and generally associated with specific jobs, and the value that each role carries for the organization.
How are salary bands used by HR?
Salary bands are used by HR to ensure pay equity within organizations by objectively classifying jobs, and their value, based on specific criteria. The effective use of salary bands in recruitment can ensure equitable and competitive pay practices across job requisitions. Salary bands also aid in budget management to help forecast and control labor costs.
For employees, salary bands can provide insights into career paths and development opportunities.
What are the pros and cons of salary bands?
The use of salary bands in HR can help to ensure equity and fairness, and transparency across all roles within an organization. In today’s environment of increasing regulations around pay equity and transparency, this is no longer a “nice to do” task. It’s required to ensure compliance with emerging federal, state, and local laws. This can be a complex process, but technology can help.
How can technology help with salary bands?
Technology can be used to streamline the establishment of salary bands, and to ensure their effectiveness through continuous monitoring and adjustments based on objective data and analysis. aHR technology can be integrated with salary survey databases, for instance, ensuring ongoing competitiveness. Tech tools can also be used to generate reports and analytics to help HR departments:
Manage salary decisions
Identify employees who may be poised for promotion, or at risk of turnover
Streamline activities like salary benchmarking, pay equity auditing, budgeting and forecasting, and labor cost analysis.
