While a minority of nonprofit employees feel that they are underpaid compared to others in similar roles, a large majority of employees don't understand how pay decisions are made at their organizations. That's a big problem, because research suggests that employees care more about whether they feel pay is fair than they do about the absolute amount they are paid.

It's best to pay people well in absolute terms, and organizations that do so get a strong return on their investment in talent. But whether an organization lags, meets, or leads the field in salary levels, clarity about the process of making pay decisions is always extremely valuable and virtually cost free.

This guide lays out six steps for creating, implementing, and communicating salary bands, and explains why and how salary bands can promote fairness, minimize bias, increase transparency, enhance communication and negotiation, and ensure rationality in how your organization compensates your team.