Which compensation model utilizes a step and grade system?

The Civil Service Model of Compensation is characterized by its structured approach, often implemented within government agencies. This model uses a step and grade system where employees are placed in specific pay grades based on their position, experience, and tenure. Each grade has a defined pay range with incremental steps, allowing employees to receive predictable increases in compensation as they accumulate years of service or gain additional qualifications.

This system emphasizes equity and consistency in pay, enabling organizations to maintain pay scales that are transparent and standardized across similar roles. Employees in this model know what to expect in terms of salary progression, making it easier for organizations to uphold fairness and maintain morale.

In contrast, the other models mentioned function differently; for instance, the Merit Pay Model focuses on rewarding individual performance rather than adhering to a structured salary schedule. The Defined Contribution Model pertains mainly to retirement benefits rather than direct salary compensation, and the Bonus-Based Compensation Model ties incentives directly to performance results rather than a fixed pay structure. Each of these alternatives lacks the step and grade framework that is foundational to the Civil Service Model.