Pay Structures
Do you feel that your current pay structure has become too rigid, too blurred, or too difficult to manage fairly?
Reward Heads designs pay structures for a wide range of organisations, typically where they have outgrown existing structures or ad hoc salaries. We turn your grades, market data and budget into pay bands people can understand and managers can apply consistently.
What a pay structure is
Pay structures are the framework that turns pay philosophy into everyday practice. Pay structures have three parts: how jobs are grouped, how pay ranges are set, and how progression is managed across your organisation. Reward Heads can help you design or refresh pay structures to ensure that they are internally coherent, externally competitive, and both understood and workable for managers and employees.
Typical difficulties include compressed ranges, unclear progression, inconsistent starting salaries, and structures that no longer fit the shape of the organisation. Reward Heads can review how your current structure is functioning, where it is creating friction, and where it is helping or hindering decision-making. We then shape a structure that supports consistency without becoming overly bureaucratic.
Signs your pay structure needs attention
- Ranges are compressed, so new joiners earn close to experienced staff, or even more
- Progression is unclear and pay rises feel arbitrary
- Starting salaries are inconsistent for similar roles
- Pay is set by negotiation instead of by band
- The structure no longer fits the shape of the business after growth or a merger
- Pay progression has stalled for people at the top of their range
How we design or fix a pay structure
- Review. We assess how your current structure works in practice, using your pay data and feedback to find where it creates friction.
- Foundations. We confirm your grading (or carry out job evaluation if needed) and your reward principles, including your intended market position.
- Market data. We use pay benchmarking to set ranges that reflect the market for your roles.
- Design options. We model structure options, covering number of grades, range widths, overlap, entry points and progression rules, and show the pros and cons and cost of moving to each.
- Test. We check the structure against current pay to identify people above or below range, anomalies and equal pay risks.
- Implement. We support the rollout with new or upgraded policies, provide manager guidance and employee communication, if you want this.
Frequently asked questions
How do mid-sized UK companies usually set up pay grades and salary ranges?
Most group jobs into grades using job evaluation or a simple levelling framework, then set a pay range for each grade with a minimum, midpoint and maximum based on market data and affordability. Progression rules then set how people move through each range. The right number of grades and the width of each range depend on the size and shape of the organisation and how many different roles there are.
How wide should a pay range be?
It depends on the role type and how much scope there is for growth in the job. Ranges are typically wider for senior and specialist roles and narrower for entry-level roles, sometimes even a single point. 10% either side of an agreed point is typical.
How do we fix pay progression problems?
Start by finding out why people are stuck: is it that ranges are too narrow, there are no rules for movement, or pay set was above the midpoint at hire. Then redesign ranges and progression rules, and cost the transition before committing.
What do we do with people paid above or below the new range?
Typically you agree a transition approach: bring people below the minimum up over a set period, and hold or slow rises for people above the maximum, known as recircling . We would model the cost of each option and show pros and cons.
Can you help a charity with a limited budget?
Yes. We design structures around affordability and can phase changes over time. We have many charity clients.
Start with a pay structure review
A good pay structure should make it easier to explain pay decisions, manage budgets, and support career development. It should also give you enough flexibility to respond to market pressures and business change. Reward Heads can help you balance those needs so your structure is clear, credible, and fit for purpose.