Range Spread

A range spread is the range of pay established by employers to compensate employees for performing their job. It includes a minimum, maximum, and mid-range pay rate. For example, the range for a particular position can have a minimum of $45,000 and a maximum of $60,000: 

A salary range spread is established through understanding market pay rates and external benchmarking. A range spread is useful for multiple reasons: 

• Job postings: Many jobs require a salary range spread to be posted, so it is useful to have this information on hand. 
• Setting targets: You can create compensation targets and adjust along the way to ensure there is an appropriate spread of pay across the company. 
• Establishing pay equity: You’re able to compare spreads across different departments and roles and understand the state of internal pay equity.
• Clear communication: Employees can be shown the salary range and where they fall within the range, making communication around salary clear and transparent. 
• Plan salary increases: Companies are better able to understand salary increases and promotions if a clear range spread is present. For example, if an employee is already at the maximum of a range when it comes to annual increases, an employer has to make a decision on if a significant increase is needed or not (particularly when compared to employees at the minimum point).