The business case for pay grades over individual ranges is clear. Switching to pay grades reduces administrative burden, facilitates internal alignment and makes it easier to set salaries for jobs that lack market benchmarks. PayScale's new eBook “Bring Back the Sizzle: PayScale’s Guide to Comp Plans That Get Workers Fired Up (in a good way),” clearly lays out the process for creating ranges. Be sure to read it!

The hottest jobs, though, fall over the top of your pay ranges for similar jobs. Because of their higher-than-average demand, they command higher prices than similar jobs. Rather than lose valuable candidates and employees to your competitors, you need to accommodate those range outliers in one of two ways.

Mykkah Herner, MA, CCP

Compensation Consultant at PayScale

When benchmarking positions, it’s easy to get tongue-tied over the terms percentage and percentile. Percentiles are admittedly confusing. People generally understand that market pay breaks out at the 10^th through 90^th percentiles, but what does that even mean? And how can I use that information to manage employee pay? When are percentages valid when talking about employee pay? I often get these questions from my clients.  The answer is that we use both percentiles and percentages when developing and managing compensation plans.

Yahoo CEO Marissa Mayer recently brought in Jacqueline Reses as a new EVP. A veteran of private equity firms, high tech and Goldman Sachs, Reses is as high-powered an executive as you can find. What does Yahoo plan to do with their new rock star? She will focus her energies on leading human resources and talent management.

Since we happen to be talent management experts, we thought we would share what we think that Reses, as well as leaders at other companies, need to know before taking on the task. PayScale's 2012 Compensation Best Practices report reveals that, for the first time ever, executives’ number one HR concern is retention. With wages climbing and competition for talent increasing, retention is a great place to start.

Before you rush off and devise efforts to raise your total retention rate, read on to learn about how retention is more complicated than it used to be. Compensation is still the key, but you need to be thoughtful and use the right data in your decisions.

Employee Turnover Rates

Employee turnover is driven by many factors including inadequate compensation, lack of employee engagement, poor job fit, etc. Whatever the cause, you can easily calculate your company's rate of turnover. This is a critical benchmark that can help you understand your relationship with your competition and with your employees. You should continually monitor this rate so you can make informed choices in the future.

In this economy, pricing jobs according to market data is crucial to attracting and retaining talent, and these hot new jobs, identified by PayScale, prove the truth of that. If you were pricing these new and highly specialized jobs according to general economic trends, you would most definitely lose the war on this talent pool. These hot jobs will need to be paid a market premium, over and above the market rate for similar positions in your organization.

Spend It Wisely

Raises are back and in a big way. After years of stagnant salary growth, The PayScale Index shows that wages are growing across the economy. If you haven't already started discussing whether or not to offer raises yourself, we're going to make it easy for you.  

Here are three potential approaches you can take to raises in 2012-13. As you might guess, we think one is definitely better than the others.

Trust Makes the World Go Round

What's the secret sauce in the recipe for business success? It's trust, according to recent research from Interaction Associates and the Human Captial Institute. The research found that companies with collaborative cultures and trust in management tend to see higher profit growth than those that do not. The bad news for corporate leaders is that they also found that trust is declining across the business world.

When it comes to compensation, it's tough to beat the high tech industry, but the industry doesn't manage their human capital with salary alone. As new research by PayScale reveals, attracting and retaining technology staff takes more than just cutting the biggest check. It requires finding the right mix of pay, benefits, culture and environment that will increase employee satisfaction.

PayScale’s new Top Tech Employer Comparison report assesses and compares over 20 leading tech firms on employment criteria like comp, benefits, stress levels, work/life balance and employee satisfaction. The report uncovers a number of complex relationships that show the difficulty of achieving workplace satisfaction.