What is a Pay Scale?
A pay scale is a document or table designed to determine how much an employee will earn in his or her job. Many companies have a pay scale set up before hiring new employees, which they show to prospective employees before hiring them. In this way, the job seeker can get a good idea of how much he or she can expect to earn while working for the company or business.
Not every company uses a pay scale to determine employee wages. Some companies seem to arbitrarily decide how much pay they will give an employee to start working for the company. Subsequent raises are similarly determined. Sometimes, a company without a pay scale will determine the subsequent increases in pay based on job performance or the overall performance of the company in the past year.
Similarly, some companies do not have a formal pay scale that is shared with employees, but they do have a loosely created pay scale to help them determine the amount of money they will offer to new employees. This informal pay scale may also be used by the company to determine how much of a pay increase will be offered to the employee.
Typically, a unionized company will utilize a pay scale. Often, a pay scale is presented in a table format. For careers requiring special education or training, the pay scale will generally have years of experience on the side and the amount of education or training completed on the top. The employee can then find the point where the these two factors meet in order to determine the amount of pay he or she will receive for the year. If the job does not require special education, the chart will just show the salary for a specific number of years of experience.
Union representatives meet with the company to determine the salaries presented on the pay scale. The pay scale itself is a part of the contract that the company and the union develop. The idea behind a pay scale is to ensure all employees are treated fairly and receive equal pay for equal experience and education. In this way, favoritism in the form of increased pay is eliminated. Although the pay scale is most often associated with unionized companies and businesses, companies without a union sometimes utilize a pay scale as well.