Top 5 questions about salaries answered

Many employees have unanswered questions about their salaries, wonder whether they are getting paid at market-related levels and how their benefits compare.

The South African Reward Association (SARA) often receives questions related to issues regarding salaries, bench-marking and benefits.

This is according to Muhammed Goolab, executive committee member of SARA. He shares the top five questions employees usually want answered.

What is a market-related salary?

A market related salary refers to the going rate that the job market is prepared to pay for a specific role. This is done through salary bench-marking, which is an important tool that is used to understand pay levels across all the roles within an organisation.

Goolab explains that bench-marking involves a process where a company's jobs are matched to roles with similar responsibilities and at similar levels outside of the business. Companies do this to identify the salary levels of various roles within the market.

How does my pay compare to others at my company and in similar positions at other companies? 

"Many times, companies participate in salary surveys that are run by independent service providers. This information provides an accurate view of salary ranges across various industries," says Goolab.

"Your human resources team may be able to share this information with you, which is typically presented in the form of a spread of salaries that indicate the lower and upper ends of the salary range for job roles."

Companies typically also have internal pay scales with lower and upper limits for each pay grade.

Where you sit on the scale will depend on differentiating factors such as skill level, experience, performance, education and so forth.

"If your company doesn't share pay-related information with staff, online resources such as job adverts can be researched. These sources, however, tend to be unreliable because the data has not been validated," says Goolab.

How are salary increases determined?

Some of the factors that employers use to determine salary increases include affordability, business performance, union agreements, industry trends, as well as salary market movements.

It is for these reasons that salary increases aren't always aligned to inflation and macro-economic trends, although both these factors are considered when determining increases.

How much could I earn when I reach my potential?  

The rates of pay for various roles are determined by market demand. Organisations pay employees for the job they perform at the level they are in within the business.

"As an employee masters a role or discipline, they are often promoted to higher levels with increased responsibilities," says Goolab.

"This is usually reflected in an increase in pay. As you master a role or discipline, you should find yourself in the upper end of the salary range for that job."

Why do my friends get paid much more for doing the same work I do?

While job roles may seem similar, several factors determine an individual's pay level.

Different industries, for example, pay at different levels for the same skill, while some companies pay premiums for skills that they place more value on.

This, combined with factors such as affordability and the differences in an individual's performance, can all contribute to varying pay levels for similar roles.