Types of Pay Structures

These pay structures include:

 Narrow-graded structures
 Career family structures
 Job family structures
 Broad-banded pay structures
 Pay spines
 Spot Rates

Which Structure Should Be Used?

Source: (Kogan Page Publication)

Narrow-Graded Pay Structure

This is also called a multi grade pay structure

Source: (Kogan Page Publication)

Career Family Pay Structure

A career family pay structure is a single graded structure where each grade has been divided into
job families, for example operations, finance, administration, marketing and IT. A career family
pay structure normally has 6 to 8 levels defined by the activities carried out and/or by the
knowledge and skills or competencies needed to perform these activities. Some job families may
have more levels than others.

Jobs in the corresponding levels across each of the career families are within the same size range
and when a points factor job evaluation system is used, the same range of scores would be given.
The pay ranges in corresponding levels across the career families are the same.
Source: (Kogan Page Publication)
Source: Reward Management: A Handbook of Remuneration Strategy and Practice
By Michael Armstrong, Helen Murlis, Hay Group
Source: Benefits and Compensation Resources

Job Family Pay Structure

A job family pay structure may resemble a career family pay structure. The key difference is that
instead of the all job families having a common grade structure, in a job family structure, each
job family would have its own pay structures. This would take into account the different market
rates between different job families.

In a job family pay structure, the level or grade structures may differ in order to reflect the
special characteristics of the roles. This may result in unequal pay for work of equal value
between different job families.

Armstrong and Murlis pointed out that career family structures can solve this problem by using
market supplements which are easier to justify on an individual basis. A market supplement is an
additional temporary payment to the basic salary of an individual job or specific group of jobs
where market pressures would otherwise prevent the organization from being able to recruit or
retain staff with a particular skill or group of skills.
Source: (Kogan Page Publication)
Source: Reward Management: A Handbook of Remuneration Strategy and Practice
By Michael Armstrong, Helen Murlis, Hay Group

Source: Job Families (Peter Reilly)

Broad Band Pay Structures

Source: World at Work

Source: Presentation Slides By Pabak Dev

Source: Job Families (Peter Reilly)

Broad Band versus Broad Graded Structures

Source: (Kogan Page Publication)

Note: Each salary band will be developed for each job family level based on market data relevant
for that level and will not necessarily match the same band level of another job family. If a level
is left blank, there are no current positions slotted in that level.

Combined Career/Job Family and Broad-Banded Structures

Source: A Handbook of Employee Reward Management and Practice By Michael Armstrong

What is a Pay Spine?

Pay spines consist of a series of incremental points stretching from the highest to the lowest paid
job.

It can be used to determine pay ranges, according to job evaluation decisions and market pay
rates. Each job pay range may span 4 or 5 incremental points.
Source: (Kogan Page Publication)
Source: Reward Management in Context written by Angela Wright published by the Chartered
Institute of Personnel and Development

Spot Rates
Source: (Kogan Page Publication)