• Organizations determine pay ranges for each job grouping based on factors such as the market average in the area.

Once the job groups are identified, the pay ranges can be examined. The minimum places the smallest value on the position, and the maximum is used to control the salary. Organizations may look at what is customary in the area, or use compa-ratios (a ration-based comparison of the salary to the market area) to help determine how actual pay levels compare to those in the market, as long as it is known that the pay ranges are based on the market average. If an employee is paid higher than the midpoint of the pay range, they receive a competitive wage in that market.