This is biggest dilemma in Indian job market to determine market pay for particular job. Because of variations and diverst nature of compensation practices across all india levels and from government sector to private sectors they do nto match each other. Every orgaization has its own compensation philosophy based practices.
Under this circumstaces you are driven by the thought that you shold follow market practice but you must know there is no standard market practice. For compensation professional with sound background of global practices its good opportunity to offer best compensation practices based on pay for perfomance.
Lets not believe on what others are doing and establish your own base salary and grade structure:
The Power of Base Pay
You're having trouble attracting good workers. Your key employees are interviewing elsewhere. What can you do? For starters, create a better compensation system. Family companies often have problems with hiring and retaining employees due to an inconsistent or insufficient pay system. Explains how to develop an effective, market-driven base pay system:
- Document your jobs. Document the responsibilities and functions of each job in your firm. Then have each employee fill out a job questionnaire detailing what he or she does. Use both to create written job descriptions.
- Group jobs. Based on the job descriptions, create an internal hierarchy by ranking each job from lowest to highest in terms of value to your organization. Then look for clusters in the hierarchy, and group the positions in appropriate grades.
- Gather market data. Obtain recent surveys containing pay data for your line of business and location. To find them, inquire at local colleges, large employers, human resource groups, chambers of commerce, and on the Internet. Match your jobs to common positions at similar companies in your industry or region. Don't expect perfect matches, but use other positions for comparison.
- Create pay ranges. Use the data to fix a salary midpoint and range for each grade of positions. You may find, for example, that the data indicates a midpoint salary of certain grade, with a range. It is likely the salary range for a given grade will overlap with ranges from the grades immediately above and below.
- Implement the system. Some of your employees' current pay may fall above or below the new ranges. For those underpaid, consider significant adjustments consistent with good performance. For those overpaid, you may have to hold adjustments for a few periods. To reduce the risk of losing overpaid employees, explain fully how you devised the pay system, and that it is based on market rates.
Next step define operational allowance and non operational allowance structure and express the circumstances and provision for eligibility to justify the allowance structure.
Then work out total cash inclusing basic salary+ operational allowance+ non operational allowance+perks and benefits cost = total cost of job.
If you are looking for only nomenclature of allowance to decorate your pay structure for negations then all above advise is waste of time.
Regards
Rashid