Human Resource Management – Pay Grades
A large organization could have hundreds or even thousands of different jobs. Setting a pay rate for each job would be extremely complex. Therefore, many organizations group jobs into pay grades – sets of jobs having similar worth or content, grouped together to establish rates of pay.
A drawback of pay grades is that grouping jobs will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organization's job structure.