2018 Structure Adjustments Now Available
By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published November 14, 2017
Most compensation systems utilize a salary structure with grade levels. Each level identifies a minimum, midpoint, and maximum pay rate. Salary structure adjustments keep the structure competitive with the external labor market, especially in the years between comprehensive market studies.
For those organizations that manage their compensation programs on a calendar year, now is the time when data is collected, and decisions are made regarding salary structure adjustments for the upcoming year. These decisions are generally based on employer surveys of compensation practices.
The Management Association has gathered data to provide structure adjustment recommendations for 2018.
Our general industry recommendations, based on this data, are as follows:
- Pay structures specifically covering production, service, and maintenance positions: 1.95% increase;
- Pay structures specifically covering non-exempt office and technical positions: 2.0% increase;
- Pay structures specifically covering exempt professional and managerial positions: 2.10% increase; and
- Pay structures including two or more of the previously identified groups: 2.0%.
To adjust your pay grade structure, modify all range midpoints using the fixed percentage supplied above. Once all range midpoints have been adjusted, expand outwards to recalculate range minimums and maximums.
Structure adjustments are a perfectly acceptable and recommended pay practice, but they should not be a replacement for compensation benchmarking at regular intervals. We generally recommend that all jobs be formally benchmarked every three to four years. In the off years, it is acceptable to apply structure adjustments.
The Management Association has a team of compensation specialists that can help with your compensation needs. Call us at 800-448-4584 to speak with one of our professionals or email us at firstname.lastname@example.org.