White-collar pay determination under range-of-rate systems, (EXCERPT), Monthly Labor Review Online, December 1984

White-collar pay determination
under range-of-rate systems

Martin E. Personick

Administrators of company pay policy face three fundamental issues: (1) setting their companies' overall pay levels in relation to those of other companies; (2) evaluating individual company jobs and determining pay relationships among them; and (3) determining pay relationships among individual workers within the same job. The last of these functions—and the subject of this article—is often accomplished by establishing minimum and maximum pay rates for a given job or grouping of comparable jobs, and providing for adjustments of individual workers' pay within this range of rates based on performance, seniority, or both.

Special tabulation developed from the Bureau of Labor Statistics 1983 and 1984 national surveys of professional, administrative, technical, and clerical pay (PATC), which cover white-collar employees in medium and large establishments, ¹ show that:

Most white-collar workers are under rate range systems providing for periodic merit (performance) reviews of their pay.
Sizable rate ranges are often established for individual company jobs, especially at the higher professional and administrative levels.
In practice, however, differences between the highest and the lowest rates actually paid are generally much smaller than differences between the maximum and the minimum rates specified for a range.

This excerpt is from an article published in the December 1984 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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Footnotes

1 The surveys' industrial coverage and minimum-size establishment were as follows: manufacturing, 100 or 250 employees; transportation, communications, and electric, gas, and sanitary services, 100 or 250 employees: mining and construction, 250 employees: wholesale trade, 100 employees: retail trade, 250 employees: finance, insurance, and real estate, 100 employees: and selected services, 50 or 100 employees.

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