How to build a salary grid?
Is creating your own pay scale one of your projects? At makesense, this has been an important issue for us too, and it is still an issue every year...
What information do you base your salaries on? How do you calculate and modify them? How do you justify a monthly salary increase? What are the legal minimums? Should you be transparent and communicate the salary scale to your employees? When and how? We tell you everything in this article, even revealing our internal functioning!
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Find out about the legal minimums in the market
Before anything else, it is useful to find out what the market salaries are in your sector, whether you are in the public, private or non-profit sector. If you are too low, job seekers may be tempted to go elsewhere. But above all, there is a legal minimum wage set by your collective agreement! Conversely, setting a salary above the market can be an advantage in terms of attractiveness. However, you must be able to do so without living beyond your means. :)
The gross SMIC
Whatever your organization, you can base yourself on the SMIC, the legal minimum wage in France. Its hourly rate is revalued every year. Since August 1, 2022, its gross monthly amount is €1678.95 for a full-time job (35H/week). And its gross hourly rate is 11.07€.
The collective agreement
As an employer, when a collective agreement applies to your organization, you must pay a conventional minimum wage (SMC) set by the collective agreement.
For example, here is what the first lines of the grid of the Syntec agreement, which represents all the employees of IT services and software publishers, look like:
There is often one salary scale per collective agreement. For the audiovisual production collective bargaining agreement, there are several salary grids that correspond to the diversity of the audiovisual personnel's jobs.
⚠️ Ask regularly about the minimum wage agreements for your sector, as they are renegotiated regularly!
So SMIC or SMC?
The key thing to remember is that, as a minimum, you must pay the higher of the SMIC and the SMC!
Target bonuses and other individual benefits are included in the calculation of the conventional minimum wage. For example, if the base salary is below the SMIC but individual benefits compensate for this, then the SMC is taken into account.
The index scale
If you have heard about salary scales, it is because you are a civil servant (State, territorial and hospital). A salary scale is used to determine the salary of a civil servant. For example, this is the case for the medico-social sector (nursing assistant, nurse, senior health executive, etc.) or the socio-educational sector (maternal assistant, socio-cultural animator, territorial physical activity and sports educator, etc.).
In the public sector, the term "gross indexed salary" is used, which is equivalent to the salary of the civil servant, aligned with his/her step or grade.
👉 Learn more about gross indexed salary
For work experience
You can also find the legal minimums for internships, apprenticeship contract and professionalization contract.
👉 To consult them, we have prepared an article on legal minimums for apprenticeship.
What is the basis for these salary scales?
Beyond the sector of activity, here are some points common to most of the collective agreements to create the salary grids:
Seniority: depending on seniority, the level of responsibility of your employees can evolve and their salary can increase. There is a salary coefficient for each level of seniority and/or level of responsibility set by the collective agreement. For example, you are not going to pay a beginner or a trainee as much as you would pay an executive or a person with 5 years of experience in a position similar to the one you are offering.
Job classification: the collective agreement applicable to your organization may also make a distinction between the main categories of positions, grades or status: construction workers, employees, technicians, senior technicians, supervisors, senior managers, etc.
Specificities: there are also specific benefits that apply to certain legal parameters of the different collective agreements. Here are some examples:
- Rules for legal salary increases for night work, Sundays and public holidays and overtime.
- Company housing
- Increased leave entitlement in the event of marriage, death or maternity leave under certain agreements
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Building your own internal salary grid?
Once you have in mind the legal minimums and mark-up rules regarding salaries, you can of course build your own internal salary grid. Here are some steps to do so!
#1 Ask the right questions
As a team, with the managers, you can build together a relevant grid for your organization.
- What do we want to value most in our employees?
- On which pillars of our corporate culture do we want to focus to build our salary grid?
- Which coefficients should be used?
- How many levels should we create?
- What are the differences between the lowest and highest salaries?
#2 Set your base salary
You can start from the SMIC, the SMC, or choose your own minimum wage, as long as it is above the legal minimum wage.
#3 Create categories
To create your categories you must first choose the parameter or parameters that are important to you. Often, categories are based on jobs, qualifications, impact on the company, or even two parameters together: jobs X qualifications / qualifications X impact.
At makesense, we have built our grid around a pillar value on which we have built ourselves: the collective. Salary varies according to the degree of contribution of an employee to the group and his/her level of autonomy. Our salary scale is not fixed but is constantly evolving.
👉 To better understand, here is our salary grid for 2021 !
#4 Valuing the components of the grid
The valuation of the tiers is then done using coefficients or directly by applying a specific pay amount per component.
👉 For more info, you can take a look at our internal salary calculator!
#5 Take into account your financial capacities
Depending on your financial capacities, your development projects and your payroll, you will have to adapt your grid so that it fits into your budget. To do this, some simulations are necessary, in line with your recruitment projects and future forecasts.
#6 Get support
If you do not have in-house professionals to create it, the easiest way is to call on an accounting firm to help you create your grid. You can also ask your accountant for advice if you want to implement a salary increase for example.
Communicate your salary scale
In addition to managers, HR or employee representatives, employees can also have access to your salary scale! Being transparent with them on this subject can bring many advantages to your organization and your employer brand. At makesense, we even offer our candidates the opportunity to place themselves on the salary scale during salary negotiations.
What are the benefits?
1/ Allow employees to evaluate themselves
On what elements is my salary based? How are my skills and experience evaluated in the organization to which I belong? What differentiates my salary from others?
2/ Guarantee equal treatment of employees
Built in an objective way, the salary scale guarantees the same treatment for everyone: "Everyone who has the same level as me earns the same thing. This avoids discrimination and provides legitimacy written in black and white for employees with higher salaries.
3/ Know how to get a salary increase
What is expected of me to get a better salary? What skills do I need to develop?
4/ Have confidence in your organization
When salary information is shared transparently and clearly, it increases the confidence your employees have in their organization. There's no reason for low masses at the coffee machine like "Adrien and Carole make a lot more than me, I wonder why!"
5/ Save time
HR or manager, the salary grid also allows you to save time during your next recruitments or for salary increases.
What goes along with communicating salaries
- A follow-up on the achievements of each person to justify that each salary is well aligned with a certain role in the organization
- An increased allowance when an employee's skills increase
- Training actions to allow those who want to improve their skills to do so
- A transparent explanation of the revaluation or redesign of a salary grid
To go further
👉 How to make a job description?
👉 Transparency, a recruitment lever
👉 8 steps to select candidates
To take action
👉 Create a recruiter space and publish free ads on jobs_that_makesense