Making the Band

Salary Bands and How They Can Help Your Organization

So, you run a nonprofit. That probably means you’ve heard the term “salary bands” in one or two (or 25) of your finance meetings. And we get it, the term doesn’t exactly spark excitement. It’s the kind of topic that instantly shuts off your brain the moment it's uttered by your HR rep. But salary bands are an incredibly helpful tool that can benefit your organization in a number of ways INCLUDING saving you money. Here’s a (relatively) pain-free guide on the subject:  

So, what is a salary band? 

Great question! Think of a salary band in terms of a leadership guide within your organization. Let’s make one up as an example: 

Band One: Entry Level

Band Two: Associates

Band Three: Managers

Band Four: Directors

Band Five: CEOs

Band one, for example, might consist of all the administrative support roles within your organization. Each of their salaries are within that band’s range, an amount determined by market-based research and benchmarked against competitive pricing. 

Are bands just about money? 

Another great question! You sure are smart. Each band is determined by other criteria as well, such as tenure and performance metrics. Band three employees, for example, may have earned a particular certification or accomplished a specific achievement in their role. 

However, since you mentioned money, it’s important to note that bands can greatly benefit your financial team. Because each band has a clear minimum and maximum pay level for each role or level, you can more easily maintain budget accuracy and future planning. It will also save you on fines or lawsuits associated with pay discrimination.

Okay, let’s say I create one of these guides. How would it serve my organization?

Salary bands are an opportunity to demonstrate transparency and clarity around what drives success. It requires leadership to clearly define and communicate the principles that guide advancement, whether that be tenure, performance, client impact, or other measurable contributions.

By codifying these priorities into clearly delineated groups and expectations, the organization ensures that every employee understands how growth happens and what’s expected at each stage. For example, if tenure is valued, progression may be linked to years of service; if performance or impact is emphasized, advancement might depend on achieving specific outcomes or metrics.

So why should I consider salary bands at my organization? 

By defining pay ranges with objective criteria, your organization can more easily follow compliance with equal pay laws. Pay transparency also builds trust with employees, which can lower staff turnover as well as save you time and energy on negotiations and other recruiting efforts. 

What about employees? How do they benefit? 

Salary bands create a clear path upwards for all employees working within an organization. If someone in band one would like to move to band two, for example, they know what their raise will look like as well as what expectations lie within that new role. Instead of looming in vagueness, a salary band makes it clear up front what is necessary for a promotion and how each employee can achieve one. 

NEED MORE GUIDANCE? WE CAN HELP! 

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