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What is a Pay Grade?

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If you're part of the federal workforce, you're probably paid according to the General Schedule, a structured pay scale which is revised each year to reflect inflation and the increased costs of living. Many private sectors use a pay grade system too.

What is Pay Grade?

A pay grade is a structured pay system that determines the amount of pay a person will receive. Each position within an organization has a specific pay grade, and new employees are compensated depending on their education and experience, insofar as it relates to their position. Many human resources departments follow structured pay schedules instead of market-based pay to maintain equity and to reduce the risk for discrimination lawsuits.

A simple pay grade structure has many levels with different steps at each level. Fifteen grades make up the General Schedule, from GS-1 to GS-15, with 10 steps within each grade. A private sector company may have 10 to 12 grade levels with up to five steps at each level. A more basic format might have minimum, moderate and high placement in each pay grade, giving more pay for a particular job to a more experienced employee.

How Do You Know Your Pay Grade?

If you don't know your pay grade, speak to your employer's human resources department. It's possible their answer will be non-specific, for example, "the low end," "near the middle" or "the high end." You could also ask co-workers what they are earning and what their pay grade is to give you an idea of how wide the pay grade is. Looking at industry pay also gives you an idea of where you lie on the scale. Additionally, sites like glassdoor.com and PayScale.com provide ballpark salary estimates for any given profession. Obviously there is no one-size-fits-all scenario, and many factors affect what you should earn, but doing your research can help you determine whether you're in the right pay grade.

How to Increase Your Salary

If you've done your research and think you're entitled to a higher salary, make sure you're prepared before you negotiate. Compile a detailed document setting out your achievements and accomplishments. Have you completed additional training or gained a degree while you've been working? Make sure your employer is aware of this. If you've worked for the same company for a long time without a pay increase, ask why your experience hasn't bumped up your salary. Find out what steps you can take to increase your salary, from taking on more challenging tasks to getting more certifications.

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About the Author

Claire Gillespie is a writer and editor with experience in law, business and PR. She has written about careers for many websites, including SheKnows and Reader's Digest.