BUILDING YOUR SALARY SCALE: THE JOB STRUCTURE
An organization’s job structure is an illustration of its how specific jobs are grouped and classified based on the nature and purpose of work, different levels of contribution, and how each level relates and progresses to one another. More importantly, the job structure provides the framework to which organizations can apply policies on compensation management, as well as design strategies around learning and development, specifically on career opportunities and promotion, all aligning to the company’s overall business objectives.
There are different types of job structures available, each one designed to support specific needs an organization might have. When choosing which type of job structure to adapt, the focus of your existing jobs – whether career-based or project-based, any future expansion, and the possible addition of new roles or teams within your organization – should be kept in mind.
The most common types of job structures are the traditional salary structure, the broad-banded structure, and the project-based structure, each with its own advantages and disadvantages.
Types of Job Structures
- Traditional job structure – provides a well-defined sequence or progression path from one job level to the next. Think of a typical career progression: Entry-level roles start as analysts, then progress to specialists, while MBA graduates (for example) start as specialists, then progress to managers, and finally to directors. The differences in levels of contribution, complexity, and pay ranges are explicit at each level, and movement within the grade or to the next higher-grade can be deliberate based on skills growth and experience. Traditional job structures are easier to manage and communicate to staff, but the pay ranges often have less flexibility than other approaches, particularly when staff reaches the maximum point of their job grade. Traditional structures are found most often in organizations with well-established career paths, where staff grow their careers by moving “up the ladder.”
- Broad-banded structure – A broad-banded structure comprises fewer bands with multiple job levels grouped into each one. Some organizations prefer the broad bands because they provide wider pay ranges and more flexibility in pay management. As staff accumulate more skills and experience, pay increases and progression can be provided through lateral movement within each band without necessitating a promotion. Broad bands are not without their own challenges, however: They often cause confusion for managers and staff since less structure and guidance are provided for salary setting and the differences between job levels within each band are not as distinct as a traditional structure. Broad-banded structures are more popular with organizations that desire a flatter hierarchy and fewer levels.
- Project-based Structure – The project-based structure also has grades or bands similar to the first two structure types above. What makes this structure different is that each grade or band is designed for roles that have short lifespans to reflect the project timing, without the possibility of promotion. A structure like this is only appropriate for project-based organizations with definite term contracts. Project-based structures often have higher minimums reflecting the need for employers to reach experienced talent that can “hit the ground running.” Employers utilizing such a structure should also consider project completion bonuses to improve retention.
In Birches Group, we believe that a simple, clear, and consistent approach to job evaluation is the key to a well-designed job structure. The type of structure and number of grades an organization chooses to go with is an easy one to adapt, but without a solid job evaluation methodology to readily provide the standard needed to classify your jobs into their appropriate levels, will only lead to bigger issues in capacity and pay management in the future.
Our Community™ Jobs solution uses only three factors – Purpose, Engagement, and Delivery – to evaluate any job across fourteen grade levels. These three factors are found in any job and together, provides a simple and transparent methodology that serves as the foundation for an exceptional job structure.
Organizations require structure to optimize and ensure the capacity it needs to achieve its goals and ultimately lead to business growth. Job structure, along with the pay structure, are one of the most important human resources management tools an organization will need to build and maintain an organized and efficient workforce. Through our integrated workforce management solution, Community™, Birches Group is ready to help your organization create a job structure that fits your needs. Contact us to learn more.
Want to know if your existing compensation practices have the elements of a good compensation program or if there are areas that could use some improvement? Take our quick Compensation Program Assessment Quiz to know your score!
Bianca manages our Marketing Team in Manila. She crafts messaging around Community™ concepts and develops promotional campaigns answering why Community™ should be each organization’s preferred solution, focusing on its simplicity and integrated approach. She has held various roles within Birches Group since 2009, starting as a Compensation Analyst and worked her way to Compensation Team Lead, and Training Program Services Manager. In addition to her current role in marketing and communications, she represents Birches Group in international HR conferences with private sector audiences.
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