“Salary ranges,” “pay grades” and “pay bands” are three terms that are close in meaning. UK public sector workers are more familiar with the term “pay scale.” In these terms, the words “salary” and “pay” are interchangeable. The key consideration in examining difference lies in the terms “range,” “grade” and “band.”
A pay band is the most flexible of these salary terms. It typically comes into play during the recruitment phase. Recruiters rarely give a specific wage when they advertise for staff. They want someone good with lots of experience and they will pay top rate for that person. This gives the upper limit of the pay band. However, they also hope to find an alternative candidate who is very clever but lacks experience. This gives the lower limit of the pay band. The average wage for people doing the same job sits somewhere inside that band. The pay band will apply across an organisation and encompass jobs at an equivalent level of seniority.
Salary ranges exist within pay bands and relate to specific positions. The HR department is more likely to deal with salary ranges than employees or recruiters. This looks at the minimum maximum and midpoint wages for people doing the same job. Analysis of salary ranges usually extend beyond the organisation because inclusion of wages paid by competing recruiters enables the business to work out what it should be paying its own staff.
Pay grades exist within pay scales. The public sector particularly implements pay scales and grades in the UK. The scale defines a rigid ladder of salaries available for a particular job. Any newcomer starts at the bottom of the scale and will get an automatic pay increase every year as she is awarded the next highest grade in the scale for time served. Sometimes it is possible to negotiate an entry point some way up the scale. It is also possible to jump several grades by acquiring new skills or qualifications. However, once the employee reaches the top of the scale, it is impossible to get a pay increase without having the scale applied to his job reassessed or applying for a different position within the organisation.
The main consideration for employees falls between pay bands and salary scales. Pay bands are more flexible and allow an individual to bargain for higher wages within the band. Pay scales, with their constituent grades offer unionised workforces an equal chance of improved wages. The grades of salary scales are often negotiated on behalf of the bulk of the workforce by a trade union.