Define Pay Grades

Tasks

Define pay grades

1. Navigate to the Pay Grades page. From the Company menu, select Compensation Setup > Pay Grades.

2. Click the Add Pay Grade button to add a new pay grade. To update an existing pay grade, click the pay grade name in Pay Grades table.

   The Pay Range Details page opens.

3. Type a unique Name for the pay grade.

4. Select the appropriate Pay Type Group from the drop-down list.

   • Select Hourly EE to define the pay grade rates in terms of hourly pay rates; Powerpay then calculates an equivalent annual salary, or;

   • Select Salary EE to define the pay grade rates in terms of annual salaries; Powerpay then calculates an equivalent hourly rate.

5. Type the Standard Hours per Pay applicable to this pay grade. This number is used in the calculation to convert rates to salaries and to convert salaries to rates.

6. Select the Restrict Out of Grade checkbox to apply pay grade validation and prevent users from entering a rate change outside the pay grade Minimum and Maximum rate values. Powerpay displays an error message when users submit a rate outside the pay grade Minimum and Maximum rate values.

   Clear the check box and Powerpay displays a warning message when users submit a rate outside the pay grade Minimum and Maximum rate values.

7. Each pay grade must be configured with several rate values to describe the pay grade. For each pay grade you define the minimum, maximum and control. Type the Minimum, Control, and Maximum values for the position into the parameters. These are required fields.

   Depending on the Pay Type Group the pay grade was configured with, you define either hourly or salary values.

   For hourly employees, define the following hourly values:

   • Minimum Rate. This is the lowest hourly amount someone working a position assigned the pay grade should earn. It must be less than or equal to the Control Rate and the Maximum Rate.

   • Control Rate. This is the 'ideal' hourly amount someone working a position assigned the pay grade should earn. Not necessarily the mid-point between the minimum and maximum, this rate represents the amount the majority of employees working positions assigned the pay grade should earn. It must be greater than or equal to the Minimum Rate and less than or equal to the Maximum Rate.

   • Maximum Rate. This is the highest hourly amount someone working a position assigned the pay grade should earn. It must be greater than or equal to both the Minimum Rate and the Control Rate.

   • Rate Midpoint. The calculated hourly value ((Minimum Rate+ Maximum Rate))/2.

   For salary employees, define the following salary values:

   • Minimum Annual Salary. The minimum annual salary that may be assigned to a person for a specific position assigned to this pay grade should earn. It must be less than or equal to the Control Annual Salary and the Maximum Annual Salary.

   • Control Annual Salary. The ‘ideal’ annual salary someone working a position assigned to the pay grade should earn. It must be greater than or equal to the Minimum Annual Salary and less than or equal to the Maximum Annual Salary.

   • Maximum Annual Salary. The maximum annual salary that may be assigned to a person for a specific position assigned to this pay grade should earn. It must be greater than or equal to both the Minimum Annual Salary and the Control Annual Salary.

   • Salary Annual Midpoint. The calculated annual value ((Minimum Salary + Maximum Salary))/2.

   Powerpay calculates the Midpoint value of the rate, and converts the Minimum, Control, and Maximum values between their hourly and salary equivalents.

8. Click Save.
9. Click Back.