Mercer’s Pay Band Tool 2.0 helps you design pay bands based on market and/or internal company data. It provides a pragmatic approach for managing compensation across all your locations through the creation of consistent pay bands.


The tool allows effective compensation data maintenance that can be performed on a year-over-year or ad-hoc basis. Different ways of presenting the results allow both high-level budget estimations and in-depth incumbent-based analysis, such as deviation from the market or internal compa-ratio.


With use of this Excel-based solution, you can model different aspects of your pay bands in a coherent manner, including the definition of midpoints, pay range widths or grade overlaps for each compensation element from base salary to total remuneration.

Tool Features


Mercer’s Pay Band Tool is Excel based and easy to administer and set up. You can compare your company's data vs. market and manage compensation analysis effectively. The basic features of the tool are administered through the intuitive user interface.


Create and maintain pay band structures

Mercer’s Pay Band Tool allows you to design your pay bands for the different countries in which your organization operates in a consistent way on a yearly basis. It gives you a fast overview of the current positioning of your employees in the band.You may adjust selected pay bands in defining different bandwidth and smoothing the progressions based on the specific market’s environment.



Budget modelling and cost control

For each pay band, the distribution of employees is shown, including associated cost to minimum and cost above maximum.

Potential cost of adjustment to band structure is displayed by band, by gender or overall and allows for forward-looking pay planning.



Deviation analysis – incumbent’s view

Next to the numerical and graphical analysis of where all of your employees lie in the band, you can also look at detailed deviation analysis for each employee, from base salary to total remuneration.This gives you the opportunity to identify reasons for possible outliers and define action plans if needed.

Key Applications

  • Develop your relevant pay bands based on your grading structure and your compensation policy or based on market data. Adjust your pay bands and switch easily between standard and customised settings.
  • Analyse each employee’s pay deviation from the market by base salary and other compensation elements. Identify reasons for possible outliers and define action plans, if needed.
  • Review the cost of overpayment and cost of adjusting pay to fit into pay bands. Review data and charts by gender. Simulate new pay structure scenarios.
  • Communicate to your HR community and line management in a consistent way. Use the tool for communication purposes.

What's new in Version 2.0?

 Improved results display

Enhanced main chart with pay bands, gender and regression lines selection. Simplified and ergonomic customization options, based on clicks and selections.

  Enhanced analysis

Possibility to build pay bands based on client’s internal data or market data; easy switch between market data statistics (25th/average/median/75th).

  Improved way the client models pay bands

The customized setup is saved and the user can easily toggle between standard and custom settings. Ability to adjust the pay bands by positioning, rounding or having unique bandwidth for each grade.

 Multiple Source Providers

In order to have a broader view of the market situation with data reflecting different perspectives you may also include in the tool the market data from up to 10 different sources, for example: Mercer WIN and Comptryx. This allows decision making to be based on a multi-dimensional picture of the market.

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