The need for formalized base pay management is imperative to a company’s operational efficiency. Salary administration (also referred to as base pay administration), provides structure to compensation initiatives through competitive benchmarking, developing salary structure, and drafting salary administration manual for validity and consistency of salary decisions. The steps that should be undertaking in a formalized approach to benchmarking and base pay administration are:
• Prepare job descriptions;
• Benchmark specific positions using empirical data;
• Build salary structure;
• Develop salary ranges;
• Draft a manual containing formal policies and procedures.