Pay structures are also increased as part of general maintenance when market pricing of benchmark jobs show that the organization has fallen behind the market. But how to pay individual employees is a management decision. As a rule of thumb, entry-level employees and low performance employees are paid closer to the minimum of the salary range. Employees who know how to do the job and who consistently perform competently would typically be paid within 10 percent of the midpoint of the salary range. Employees who have exemplary performance over time, possess significant experience, or have skills that were currently in high demand in a hot market would be paid at the upper end of the salary range.
Employees can receive additional compensation a couple of different ways.
They can progress through the salary range by receiving merit increases. They can progress by receiving promotions or when their job is reclassified. They could also receive a lump-sum bonus, which does not factor into base pay. The development and management of a compensation system is a vital part of an organization s ability to achieve continued success and to control costs. Controlling salary costs is an important concern for all organizations, public and private.