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Pay Structure Generator >>

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This generic pay structure tool generates a pay structure with the feature that the midpoint pay at each successive grade is a fixed multiple of the midpoint pay of the prior grade. It is thus suitable for use when pay increases are granted as a percentage of the current incumbent's pay, or especially as a percentage of pay at the midpoint of the incumbent's grade. A percentage of current pay approach is often used in merit pay programs.

The formula used by the program to generate structures is as follows:

Such a formula is curvilinear on standard Cartesian axes, but graphs as a straight line on a semilogarithmic scale. Graphs are included which are linked to the structure you generate.

The application will automatically derive the multiplier based on your specification of the midpoints of the lowest and highest grades, and the number of grades (or steps) desired. Optionally, if you unprotect the sheet, you can specify the multiplier. You may want to do this as a final step in order to get a structure based on a rounded multiplier. Note that if you substitute your own multiplier for the one derived by the application, the midpoint of your highest grade will no longer be controlled by the figure you had entered as the midpoint of the highest grade.

A structure leverage factor is also provided to directly adjust the above equation to account for regional or other variations of a base structure.

This application also allows you stipulate a range spread evenly on each side of the midpoint, expressed as the percentage of the minimum pay that you desire the range spread to be at that grade. You can even stipulate one range spread at the lowest grade of the structure, and a different range spread at the highest grade. The application will interpolate the range spreads at all other grades using an exponential formula similar to that used to generate the midpoints that gradually "fans" out the spread.

Another feature of the application allows you to specify the level of rounding of the minimum, midpoint, and maximum pay points generated for your structure. This can be controlled by entering a number in the specified cell which equals the number you would use in Excel's ROUND function. You can round in increments of factors of 10 (e.g., to the nearest penny, 10 cents, dollar, $10, or $100).