24 Jun Common Pay Range Terminology
Recently, modernizing pay ranges has become a major area of focus for companies. While the start of the year provides a fitting opportunity to evaluate pay practices and ensure the right pay structures are in place, it’s also an activity that can – and should – be done regularly. Thus, whether you’re reading this at the beginning of your fiscal year or you’re simply gearing up to make a change in your company’s approach to compensation, it’s never a bad time to reevaluate pay ranges.
Before you can begin exploring pay ranges in depth, however, it’s a good idea to refresh yourself on some common terminology for discussing pay ranges. While these terms are likely familiar to you, they are often used quite differently in various schools of thought. For the purposes of clarity and cohesion, here’s a quick recap of some key terms that you may encounter when discussing pay ranges with your colleagues and key stakeholders.
- Function: The major functional areas of a business that represent groups of families. Typical function areas are Strategy, Product, Marketing, Finance, Human Resources, Technology, and Operations.
- Family: A group of related specialties that are focused on common goals related to the function. Typical Job Families in HR are Rewards, Recruiting, and Administration.
- Specialty: A sub-group of a job family that further defines roles of similar job functions that are common in large and medium sized companies. Typical Job Specialties in HR Rewards are Compensation, Benefits, Work/Life practitioners.
- Job: A series of related job titles with progressively higher levels of impact, knowledge, skills, abilities (competencies), and other factors, providing for promotional opportunities over time. Typical Job Families in HR are Rewards, Recruiting, and Administration.
With these terms in mind, you can now prepare for an informed conversation on pay ranges with your associates and begin discussing considerations for choosing the pay structures in your organization.
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