What is a pay grade and how do employers use them?
A pay grade is a numbered or lettered classification that groups jobs of similar value, responsibility, and complexity into the same compensation range. Pay grades provide the structural frame for assigning salaries, setting merit increases, and managing internal equity across roles. Most mid-size and large employers use 8 to 20 grades spanning entry-level through senior executive, with each grade mapped to a specific pay range with minimum, midpoint, and maximum anchors.
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