What does a wage curve help to establish in terms of employee compensation?

A wage curve is a graphical representation that illustrates the relationship between the wage paid to employees and the corresponding level of their job responsibilities or the market value of a position. The wage curve helps organizations determine how to structure their pay scales in accordance with job grades, ensuring that each position is compensated fairly based on the market and internal equity.

This concept is integral to establishing pay scale progression, as it helps organizations define salary ranges for various jobs and levels within the company. By analyzing the wage curve, HR professionals can identify how salaries should progress from entry-level positions to more senior roles, aligning compensation with the increased responsibilities and skills required for higher-level positions.

In essence, a wage curve provides a foundation for developing a strategic approach to compensation, making it clear how pay should evolve throughout an employee's career path within the organization. This supports equitable and competitive compensation practices that can attract and retain talent over time.