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The University of Houston uses pay grade structures to establish compensation limits for jobs.

Midpoints of the pay ranges represent the university's desired competitive position to the external market and are determined by a statistical calculation based on external salary survey data for benchmark jobs in each pay grade. The minimum and maximum of each pay range represent the minimum and maximum values, respectively, to the University of all jobs assigned to that particular pay range.

In most cases, up to the top of the first quartile is considered the range of value for a newly hired or promoted employee who meets the minimum qualifications of the job. Thus, most employees should be hired or promoted within the first quartile of the range. Hiring employees above midpoint requires prior approval by the Human Resources Department and the appropriate Vice President.

Hiring employees below the minimum of the pay range is contrary to university policy and is not permitted. Conversely, the maximum of the pay range is the upper limit of pay for a job. An employee's rate of pay may not normally exceed the respective maximum for the job.