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Compensation

Pay Grade

A defined pay range associated with a job level or band.

Full Definition

A pay grade (also called a salary band or pay band) is a range of compensation associated with a specific job level or band within the organization's pay structure. Each grade has a minimum, midpoint, and maximum salary. Pay grades provide a consistent framework for making pay decisions, ensure internal equity, facilitate salary benchmarking, and give employees a clear view of progression opportunities. HR software maintains the pay grade structure and flags employees paid below minimum or above maximum for their grade.

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