developing pay-scales

12 September 2019

Presented by: Lionel van SchalkwijkPE Corporate Services

Developing pay-scales

Summary of Job Evaluation Process

•Job Analysis & Job Description

•Job Grading

•Grade Map

•Company salary scales

•Competitiveness analysis

From ………..

Org-Chart

▪ In a typical org-chart, positions are shown based on their reporting lines.

▪ All positions (and the respective incumbents) seem to be on the same level in a

comparable reporting line

Rep

ort

ing

Lin

e

To ………..

Job Evaluation

▪ Job evaluation shows the relative value of the job.

▪ Positions with comparable evaluations are shown on the same level.

Jo

b E

valu

atio

n

13 September 2019 P-E Corporate Services SA 5

…..Grade*

16

15 Technical Manager

14

Financial Manager HR Manager Manufacturing Manager Inbound Logistics Manager Business Dev Manager

Outbound Logistics Manager Nat Sales / Mkt Manager

Design Engineer

Development Engineer

Financial Accountant Maintenance Supervisor Finished Goods Stores Svr. Client Liaison Supervisor

Senior Supervisor Production

Snr Supervisor Pre Production

Health & Safety Officer Logistics Planner Quality Assurance Officer Project Coordinator

Laser Programmer

Robot Programmer

Client Liaison Officer Process Technician

Quality Technician Junior Development Eng

Technical Supervisor Boiler Maker

Market Researcher / CLO

Mktng / Promo coordinator

Sales Executives

Shift Supervisor Procurement Officer X-Rider Project Leader

Stores Svr. (Bracket / Component)

Stores Svr. (Consumable Stores)

Stores Svr. (Raw Mat & Tube)

IR & HR Admin Officer Logistics Project Coordinator

Financial Accountant / Clerk Scrap & Security Officer

Wages / Office Admin

Creditors Clerk Data Capturer Quality Admin Clerk Junior Mech Specialist

Debtors Clerk Stores Co-ordinator Quality Receiving Inspec Systems Administrator

Pricing Administrator Technical Assistant

Receptionist

Fitment Team

ABC ManufacturingManaging Director

…... Grade* Finance Human Resources Manufacturing Logistics Sales & Business Development Technical

7

6

5

13

12

11

10

9

8

Grade Map


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Paterson Grades

Employee competitiveness - graded salary scales

Indv salaries

A1 A2 A3 B1 B2 B3 B4 B5 C1 C2 C3 C4 C5 D1 D2 D3

Developing Salary scales


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Midpoint Indv salaries




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Min Scale Min-Mid Midpoint Mid-Max Max Indv salaries




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Scale



Basic Salary vs Guaranteed

Package?

Market data and/or internal

equity? Affordable?

Market data –source, date and

percentile

Single vs multiple scales (e.g. by

region or function)

Which employees does / should the

scale cover?

What do I do with scarce critical skills paid at a

premium?

What is the typical range

spread (to min and max)?

Consistent slope vs kink(s) in the

pay-line?

Annual vs monthly?

Calculating market based pay-line


1. Determine data source (reliable source)• National Salary Survey• Industry Salary Survey• Multiple surveys• Customised Salary Survey• Benchmark positions against the salary survey

2. Age data to September **** (lead – lag?)3. Determine where you want to pay relative to the market

(median?)4. Extract market data by graded tables / benchmark positions. 5. Using exponential regression calculate line of best fit (use

the grade (x-value) and corresponding market salary (y-value) – watch out for swamping


Survey Sample 25 P

32 115

494 958

529 632

Total Average Cost: 155 678

© P E Corporate Services SA (Pty) Ltd

Other Non-Cash Benefits 8 822 12 313 15 513 44.02 5 419

Medical Aid 22 759 36 444 44 038 90.28 32 901

Retirement Funds 30 729 49 100 54 079 81.31 39 923

Company Car 109 722 140 548 184 038 12.96 18 215

Other Cash Allowances 9 237 12 588 15 418 29.12 3 665

Car Allowance 67 176 84 941 118 991 14.63 12 426

26 130

Performance/Incentive/Commission 23 875 36 867 57 656 46.11 16 998

75 P

General Bonus 32 363 37 264 43 723 70.12

Annual Cost Of Employment 448 390 592 742 725 783 806 788

Benefit Description % Who

Received

Average

Cost25 P 50 P

Monthly Basic Salary 27 521 36 734 43 581 49 593

Annual Guaranteed Package 418 662 557 813 683 451 738 235

Hay 228-268

Broadband CL

Market Remuneration Data:

1236 10 P 50 P 75 P 90 P

Industry (All) Industries Modal Grade Paterson C2

Peromnes 10

Survey Date 2018 / 2019 Market Data moved to October 2019

Location ALL LOCATIONS Market Data move % 0.00%

P E Corporate Services - 2018 / 2019

Position Remuneration Report

Position Title: Accountant 2: GS020155

Description: Not qualified other than by experience. Responsible for all financial procedures

connected with one operating unit, including preparation of accounts, financial

planning and budgeting, reporting of budget variances, cost control and cost analysis

programmes. May be studying towards CA or CMA. Reports to Chief Accountant.

Not qualified - More than 10 years experience



Company ABC Ltd - TITLE Grade Survey CodeGuaranteed Package (September ****)

25th 50th 75th

8 SALES ANALYST /SPECIALIST C3 C3 *** *** ***

7 INTERNAL AUDITOR C2 GS020030 *** *** ***

7 FACILITIES COORDINATOR C2 GS051257 *** *** ***

7 MAINTENANCE SUPERVISOR C2 GS080095 *** *** ***

7 ACCOUNTANT C2 GS020155 *** *** ***

7 EMPLOYEE ENGAGEMENT OFFICER C2 GS040060 *** *** ***

7 PAYROLL OFFICER C2 GS040015 *** *** ***

7 JUNIOR IT TECHNICIAN C2 GS030061 *** *** ***

7 SKILLS DEVELOPMENT ANALYST C2 C2 *** *** ***

7 MARKETING COORDINATOR C2 GS100022 *** *** ***

7 QA MANAGER C2 GS100250 *** *** ***

6 REVENUE ANALYST C1 GS020135 *** *** ***

6 RECRUITMENT OFFICER C1 GS040005 *** *** ***

6 COMPLIANCE SUPERVISOR C1 C1 *** *** ***

5 BOOKKEEPER B5 GS020115 *** *** ***

4 COMPLIANCE MONITORING B4 B4 *** *** ***

4 TEAM LEADER B4 GS100172 *** *** ***

3 TEAM LEADER - INBOUND B3 B3 *** *** ***

3 I PRODUCT ADMINISTRATOR B3 GS010095 *** *** ***

3 JUNIOR BOOKKEEPER B3 GS020100 *** *** ***



Calculating market based pay-lineCompany ABC Ltd - TITLE Grade Survey Code

Guaranteed Package (September ****)

25th 50th 75th

8 C3 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

6 C1 ***

6 C1 ***

6 C1 ***

5 B5 ***

4 B4 ***

4 B4 ***

3 B3 ***

3 B3 ***

3 B3 ***


ABC Ltd line of best fit - Guaranteed Package (Market 50th)

Paterson Grade

ABC (Internal) Marketproposed salary

scalesAll Ave figures Combined Ave All Ave figures Combined Ave

15 D5 *** *** ***

14 D4 *** *** ***

13 D3 *** *** ***

12 D2 *** *** ***

11 D1 *** *** ***

10 C5 *** *** ***

9 C4 *** *** ***

8 C3 *** *** ***

7 C2 *** *** ***

6 C1 *** *** ***

5 B5 *** *** ***

4 B4 *** *** ***

3 B3 *** *** ***

2 B2 *** *** ***

1 B1 *** *** ***



0

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400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

ABC Ltd proposed pay-line (September ****)

Market 50th perc Individual Salaries

B1 B2 B3 B4 B5 C1 C2 C3 C4 C5 D1 D2 D3 D4 D5




Calculating internal co pay-line

Company ABC Ltd - TITLE Grade Basic Salary (pm)Annual Guaranteed

Package

8 SALES ANALYST /SPECIALIST C3 *** ***

7 INTERNAL AUDITOR C2 *** ***

7 FACILITIES COORDINATOR C2 *** ***

7 MAINTENANCE SUPERVISOR C2 *** ***

7 ACCOUNTANT C2 *** ***

7 EMPLOYEE ENGAGEMENT OFFICER C2 *** ***

7 PAYROLL OFFICER C2 *** ***

7 JUNIOR IT TECHNICIAN C2 *** ***

7 SKILLS DEVELOPMENT ANALYST C2 *** ***

7 MARKETING COORDINATOR C2 *** ***

7 QA MANAGER C2 *** ***

6 REVENUE ANALYST C1 *** ***

6 RECRUITMENT OFFICER C1 *** ***

6 COMPLIANCE SUPERVISOR C1 *** ***

5 BOOKKEEPER B5 *** ***

4 COMPLIANCE MONITORING B4 *** ***

4 TEAM LEADER B4 *** ***

3 TEAM LEADER - INBOUND B3 *** ***

3 I PRODUCT ADMINISTRATOR B3 *** ***

3 JUNIOR BOOKKEEPER B3 *** ***



Company ABC Ltd - TITLE Grade Basic Salary (pm)Annual Guaranteed

Package

8 C3 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

7 C2 ***

6 C1 ***

6 C1 ***

6 C1 ***

5 B5 ***

4 B4 ***

4 B4 ***

3 B3 ***

3 B3 ***

3 B3 ***



Paterson Grade



15 D5 *** *** ***

14 D4 *** *** ***

13 D3 *** *** ***

12 D2 *** *** ***

11 D1 *** *** ***

10 C5 *** *** ***

9 C4 *** *** ***

8 C3 *** *** ***

7 C2 *** *** ***

6 C1 *** *** ***

5 B5 *** *** ***

4 B4 *** *** ***

3 B3 *** *** ***

2 B2 *** *** ***

1 B1 *** *** ***



0

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1 000 000

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1 400 000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16


ABC Ltd line of best fit Individual Salaries





Paterson Grade



15 D5 *** *** *** *** *** *** ***

14 D4 *** *** *** *** *** *** ***

13 D3 *** *** *** *** *** *** ***

12 D2 *** *** *** *** *** *** ***

11 D1 *** *** *** *** *** *** ***

10 C5 *** *** *** *** *** *** ***

9 C4 *** *** *** *** *** *** ***

8 C3 *** *** *** *** *** *** ***

7 C2 *** *** *** *** *** *** ***

6 C1 *** *** *** *** *** *** ***

5 B5 *** *** *** *** *** *** ***

4 B4 *** *** *** *** *** *** ***

3 B3 *** *** *** *** *** *** ***

2 B2 *** *** *** *** *** *** ***

1 B1 *** *** *** *** *** *** ***

Calculating Company pay-line


0

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16


ABC Ltd line of best fit Market 50th perc Individual Salaries Proposed pay-line




0

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Sala

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Paterson Grades

ABC Ltd Individual Guaranteed Package salary comparison against proposed co pay-line and salary scales (September ****)

Pay-line Midpoint Individual Salaries



Midpoint of grade salary

scales

Slope = (10% to 30%)


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Paterson Grades

ABC Ltd Individual Guaranteed Package salary comparison against proposed co pay-line and salary scales (September ****)

Minimum Scale Pay-line Midpoint Maximum Scale Individual Salaries


Calculating Grade Pay-Range


Paterson Grade

Proposed salary-scales (Guaranteed Package)

Rands per annum as at September ****

Minimum Midpoint Maximum Slope

D5 *** *** *** 1. 176

D4 *** *** ***1. 176

D3 *** *** ***1. 176

D2 *** *** ***1. 176

D1 *** *** ***1. 176

C5 *** *** ***1. 176

C4 *** *** ***1. 176

C3 *** *** ***1. 176

C2 *** *** ***1. 176

C1 *** *** ***1. 176

B5 *** *** ***1. 176

B4 *** *** ***1. 176

B3 *** *** ***1. 176

B2 *** *** ***1. 176

B1 *** *** ***


1. Determine Range spread to minimum and maximum scales.

Calculating Grade Pay-Range

Executives / Top

Management

Management and

Professionals /

Junior

Management

Other Staff Levels

Up to ± 10 % 19 18 25

± 10 % to 15% 22 24 22

± 15 % to 20% 30 36 34

Over ± 20% 29 22 19

Percentage of Organisations

PERCENTAGE

APPLIED


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Implementing Salary scales

Suggested guidelines for addressing outliers

• “Outliers” in terms of pay should be reviewed to identify their validity (ensure it is not simply a wrong grade on the payroll record etc), and corrective action taken where appropriate.

• Valid outliers should be ring-fenced with reasons for them being outside the pay scale parameters. (You may wish to approve these reasons).

• People paid outside the parameters, for no specific/valid reason, should be moved soonest to within the scales, or dependent on the size of the % move required, over a period of time (say within 2 - 3 years – this needs your input).

• New appointees should be paid within the scale parameters.


0

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2 3 4 5 6 7 8 9 10 11 12 13 14

Sala

ry (

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Pac

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and

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.

Paterson Grades

ABC Ltd Equity analysis (A3 to C5) for Guaranteed Package Pay-Scales as at …. 2018.

Minimum Scale Midpoint Maximum Scale African Female Coloured Female Indian Female

White Female African Male Coloured Male Indian Male White Male

A3 B1 B2 B3 B4 B5 C1 C2 C3 C4 C5 C5

Other deliverables (Equity analysis)


Basic Salary vs Guaranteed

Package?

Market data and/or internal

equity? Affordable?

Market data –source, date and

percentile

Single vs multiple scales (e.g. by

region or function)

Which employees does the scale

cover?

What do I do with scarce critical skills paid at a

premium?

What is the typical range

spread?

Consistent slope vs kink(s) in the

pay-line?

Annual vs monthly?

developing pay-scales

Documents