Pay Grade

A "pay grade" is an organized compensation system that establishes a range of salary or wage levels for different job roles within an organization. It structures jobs vertically by responsibilities and requirements, and horizontally by factors like performance and experience. Employees progress through the pay grade system as they take on more duties and receive positive reviews, providing a standardized framework for advancement and compensation. Pay grade systems are commonly used in public sector, military, and large private organizations to standardize pay and provide clear guidelines for employees, but they can be rigid and not dynamic enough for today's changing world of work.