You’ve built your first set of bands– great! Now, let’s talk a bit about what you are looking at, and what to look out for:
- Raw Benchmark: Click on the chainlink to learn more. This will display the data associated with the benchmark (AKA- if you were to search for this Family + Level + Location in benchmarking today, what would the salary be?). In The “Base Pay Range” column (see 3), this is indicated by the dotted black line.
- Base Pay Target: This is the Pave-recommended midpoint. In The “Base Pay Range” column (see 3), this is indicated by the solid blue line.
- The Midpoint/Smoothing: See below for more information on how Pave determines midpoints.
- Employee Distribution: The blue dots are indicative of where your current employees lie within a given band. You can update what band an employee falls into using the Employees tab. You can also click the page button on the far left to get more insights on a per-employee basis.
The Midpoint– Why do we smooth?
The dotted black line represents the raw benchmarking data for that band. In many cases, this will be the band midpoint; however, in some cases, the Band Creation tool overrides the raw benchmarking data and recommends an alternative band midpoint. The blue line, then, is the Pave-recommended midpoint. This is part of Pave’s band smoothing process, which ensures that all bands within a job family are the right “shape” (for instance, that the P1 band midpoint is always less than the P2 band midpoint).
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Key Outcomes of Smoothing:
- Corrects for variability in band targets (caused by variability in market data)
- Creates a roughly exponential progression between band targets within the same band family
- Standardizes across band families by applying the same smoothing logic to all band families
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Key Principles of Smoothing:
- The first band that Pave will calculate is the P3 band. P3 Benchmark and P3 Midpoint will always be 1:1 at initial band generation.
- Why? P3 is a central band! It is critical for defining band shape and relationship between individual contributor and management levels. And, it’s also where we have a lot of data.
- There is a certain threshold/spread that we will allow for our band midpoints coming from benchmarking data.
- We ultimately try to adhere as closely as possible to the raw benchmark, so long as the raw benchmark falls within that threshold.
- If a raw benchmark is not within that threshold, we will determine/calculate a new midpoint.
- In situations where we need to smooth, we value the relationship between jobs/ranges more than we value the raw benchmarking data.
- The first band that Pave will calculate is the P3 band. P3 Benchmark and P3 Midpoint will always be 1:1 at initial band generation.