Salary bands set the minimum, midpoint and maximum pay for each level of role. How to build salary bands from market data, how wide to make them, and how to handle people who fall outside their band.
Salary bands — also called pay bands or pay ranges — define the minimum, midpoint and maximum salary for each level of role in a company. They replace case-by-case pay decisions with a structure: similar roles at similar levels are paid within the same range, and the reasons for placing someone high or low in that range are explicit. Salary bands matter more every year, because pay transparency rules increasingly require employers to publish ranges in job adverts and justify differences between people doing equivalent work.
Report compa-ratio — salary divided by band midpoint — for every employee. It shows at a glance who is underpaid for their level, and it is the first number to check when a pay equity question arises.
Introducing salary bands always reveals people paid below the minimum or above the maximum. Below-band salaries should be brought up to the minimum on a published timeline, prioritised by the size of the gap. Above-band salaries are usually "red-circled": the person keeps their pay but receives smaller or no increases until the band catches up, and the reason is documented. Hiding either group defeats the point of the exercise and creates exactly the unexplained differences that pay transparency law targets.
Ettex Sheets is a practical home for the structure while the company is small enough not to need a compensation platform: one tab for levels and bands, one for market data, and an employee view that calculates each person's position in band and compa-ratio. The same bands then drive the annual compensation review and the cost side of headcount planning, so pay decisions and budgets use one set of numbers.
A pay scale usually sets fixed steps, common in the public sector, where pay rises automatically with service. Salary bands set ranges, and where someone sits within the range depends on skills, performance and market factors.
Increasingly yes. Many jurisdictions now require pay ranges in job postings, and publishing bands internally builds trust — provided the reasons for placement within a band are clear.
Review them annually against fresh market data, before the compensation review, and adjust sooner for roles where the market moves quickly.
A compensation review decides salary increases, promotions and bonuses in one cycle. How to set the budget, give managers guidelines they can apply, check for pay equity, and communicate the outcome.
Workforce planning compares the skills and headcount a business will need with what it has, then closes the gap on purpose. A practical process, the numbers to use, and the mistakes that turn it into a spreadsheet nobody trusts.
Headcount planning decides how many positions each team gets, what they cost and when they are filled. How to build a headcount plan, keep it reconciled to the budget, and handle changes during the year.