Welcome back. In this lesson, we're going to be discussing salary structures, starting off with a discussion and an overview of our basic salary structure terminology. So first of all, what is a salary structure? A salary structure is a hierarchical set of jobs and their associated pay ranges. And so what does this actually look like? So let's say that we're benchmarking an engineer. Then we're going to be looking up into the labor market, perhaps getting data from a salary survey. And then we'll have our benchmark pay rate for that engineer. But then, of course, not all engineers in our organization are going to be making the exact same pay rate. So instead, what we might have is our benchmark rate, our midpoint, be determined by our salary survey. And then we're going to add and subtract 20% to determine our range. And so that is just an example for one grade. But if we had a full structure, it would look something more like this. So what do we see here? So the first thing that we'll see is, of course, our different job titles. So for example, at the lower end of our structure, we'll have our junior engineers, followed by our perhaps just our engineers, and then our senior engineers. And then there could be lead engineers, or principal engineers, or so on. Another thing we'll see are our grades. So these are, again, the hierarchical ordering of the different jobs in our hierarchy. We also have our salary midpoints. So we want these to be roughly the midpoints for where most people will be earning for these different grades. And those will be tied to our external benchmarks. And then lastly we have our ranges. We have both the minimum salary that you might make as a junior engineer and also the most that you might make as a junior engineer. And to get a higher pay, you would have to be promoted into the next grade. And so let's look at this from the employee's perspective. So suppose that you've just graduated from college. You have your engineering degree, and you come out and you join this organization. Well, where are you going to start? Naturally, you're going to start at the bottom. So you might start out at the minimum for a junior engineer. The organization might have some flexibility to start you at the higher level if you negotiate that. But if you come into the organization, you might typically start off at the minimum. And so let's say that you join the organization, of course you do your job very well. Well, then you might get raises. And as you gain tenure and get raises over time, then you might be considered a good candidate for a promotion. And so there you go, so now you are a full engineer. And then after doing your job well, once again you get raises. But after a certain point you can't go any higher. You've reached the cap of an engineer's salary. And at this point, you can't get any more raises by doing your job well, or by having longer tenure. Rather, the way that you get a raise is by getting another promotion to a senior engineer. And so in our next video we'll be talking about how we actually set these grades, how we set those benchmarks, and how we set those ranges. Thanks, see you soon. [BLANK AUDIO]