Payscale

A pay scale, or payscale, is a framework used to determine and organize compensation for a job or group of jobs. It typically defines a salary range with a minimum, midpoint, and maximum pay, and may include steps or bands that guide progression. Pay scales are used by organizations and, in some contexts, by governmental bodies to standardize remuneration for comparable roles.

Pay scales serve two main purposes: internal equity and external competitiveness. Internal equity seeks fairness in pay among employees who perform similar work, while external competitiveness ensures wages are attractive relative to the market. Scales can be developed from internal job evaluations or external market data, or a combination of both.

Structure and terminology vary, but common elements include pay grades or bands that group jobs of similar value, each with a defined range. Some systems also specify midpoints, steps, or progression criteria. Advancement within a scale may depend on tenure, performance, skill acquisition, or additional responsibilities. Pay scales can be adjusted for geography, industry, or organizational size.

Methods for establishing payscales include job evaluation (such as point-factor or ranking methods) to assess job value, and market pricing or benchmarking against salary surveys and industry data. Organizations may use competency- or skill-based approaches in conjunction with job-based scales. Attrition, inflation, and labor market trends influence periodic updates to scales.

Payscale can also refer to the company Payscale, a provider of compensation data and software that offers salary information, benchmarking, and pay-management tools for employers and employees.