Lead-lag

Pay behind the market

Lead the market

Compensation based on the number of hours worked

Compensation based on individual performance

Compensation based on an annual salary

Compensation based on market benchmarks

By averaging the grade minimum and grade maximum

By aligning with market survey data

By considering the job ' s level of complexity

By adjusting for geographic location

Variation in job titles, roles, and responsibilities within an organization

Differences in job requirements, qualifications, and performance expectations

Inclusion of jobs from different industries and sectors in the job structure

Representation of diverse employee demographics in job categories

Different pay rates for different job levels

Pay based on individual performance

Pay based on market benchmarks

Same pay rate for all employees in a job category

Demotions, salary reductions, and disciplinary actions

Promotions, market adjustments, and salary structure changes

Changes in job responsibilities, lateral transfers, and performance improvements

Employee resignations, retirements, and terminations

Employee recognizes the entire increase at one time

There is a greater first year cost to the company

Easier administration compared to a lump-sum increase

Allows organization to establish a probationary period

0-2%

2-4%

4-6%

6-8%

To determine appropriate salary ranges for different job levels

To incentivize high performance and productivity among employees

To attract top talent from the market and maintain a competitive edge

To comply with legal and regulatory requirements related to compensation

Cost of living variations, tax implications, and host country regulations

Individual performance ratings and merit-based pay

Skill development and career progression opportunities

Budget constraints and financial sustainability