What does the principle of parity suggest regarding the number of grades used in salary ranges?

The principle of parity indicates that as more salary grades are introduced, the salary ranges within those grades tend to become smaller. This occurs because the distribution of salaries becomes more refined and targeted, allowing for a more precise alignment of compensation with the various levels of work complexity and responsibility within an organization.

When there are numerous grades, each specific grade can cater to a particular level of experience, skill, and job complexity, leading to a tighter range of pay for that specific grade. This allows organizations to differentiate more clearly between roles and ensures that compensation is equitable relative to the responsibilities associated with different positions.

Thus, the principle of parity underscores the relationship between the number of grades and the size of salary ranges, highlighting that an increase in grades leads to smaller, more defined ranges which aids in promoting fairness and competitiveness in pay structures.