Creating Salary Bands, Grades, and Designations: Expert Insights and Best Practices

Dear All,

We are a pharmaceutical KPO in Chandigarh and are planning to create salary bands for different grades. Could anyone please suggest to me on which grounds do we create salary bands? Is it based on qualification, experience, or designations?

Members of this site have provided very useful information to people like me who are new to HR. I hope to receive help and suggestions from seniors on this site.

Many Thanks.

Hi Jyoti,

Preparing a salary band will completely depend on the designations wise only. First, frame all the designations and allot their work levels, then fix the salary range for each level in an orderly manner. Based on the levels and the salary range for each level, the employee's salary will be fixed by considering his relevant experience and qualifications within the range. I hope I am clear about this. I welcome suggestions from seniors.

Cheers, Sree.

Dear Jyoti,

While creating salary bands, you should initiate it with the list of Hierarchy. Hierarchy based on the designation should be interlinked with the work profile allotted. And, the designing of designations will be based on their level of expertise, qualifications, etc.

Salaries and facilities provided to employees will be based on their designation and will progressively increase from lower to higher designations.

Finally, you can create the band. Let's say beginners or fresher will be provided with the A grade. In this grade as well, you should do different segregations based on their experience and qualifications. For example, an employee with 0-1 year of experience will be provided A1 and 1-1.5 years of experience will be A2. The reason for this segregation is to create a distinction among people with varying experience levels.

This band would be decided while defining the job description where you can consider anyone with 0-3 years of experience as a team member.

Similarly, after a team member, for a team developer, you can rate it as B1 or B2.

Jyoti, this can be customized or modified as per the company's requirements.

Please do respond if you find it useful.

Regards,

Rachna

Dear Sri and Rachna,

Many thanks for providing such useful information to me. I had a few doubts which are now clear after going through your responses. I have the hierarchy, JDs, and the designations ready, and now I just need to work on salary bands.

Just one more clarification, please. We do have grades which are based on the designations (e.g., A, A1, B, B1, etc.). Are the grades and the salary bands interlinked or the same thing? Or do they need to be separate?

Thank you.

Hi Jyoti,

How do you diversify the grades within the same designation? Could you please elaborate on the different grades?

--Sree

Dear Jyoti,

In your company, they might have defined grades based on salary parameters. In reciprocation to this, bands can be defined based on the level of expertise, qualification, and skill set.

For example, in the lowest hierarchical team of 5 members where we require individuals to be graduates with industry experience of 2-4 years, if we hire someone with 2 years of experience at Grade A1, we can establish a policy where the individual will be ranked as A2 after completing 1 year with the company and meeting any predefined standard of the skill set.

Jyoti, the reason for implementing such a system is to continuously provide new motivation at work and to acknowledge the hard work of employees, as many companies typically revise designations after 1.8 months or a 2-year span.

Please provide feedback on the usefulness of this approach.

Regards,
Rachna

Hi Rachna and Sree,

Thank you for the information provided. I am done with the grades, but we have done it based on the designations/hierarchy. Since we are a Pharmaceutical KPO, salaries vary among different departments. Therefore, even at the manager level, salaries differ between technical and non-technical departments.

Thank you so much for your help and the wonderful advice/suggestions. Looking forward to staying connected!

Hi Rachna and Sree,

Thank you for the information provided. I am done with the grades, but we have done it based on the designations/hierarchy. Since we are a Pharmaceutical KPO, the salaries vary with different departments. Even at the manager level, salaries differ in the technical and non-technical departments.

Thank you so much for your help and the wonderful advice/suggestions. Looking forward to staying connected!

Hi Rachna,

Do we also need to survey the salaries provided by the competitors so that the salary and band will be competitive in the industry?

Hi,

Please visit the following links for more information on salary bands:
- [https://www.citehr.com/234807-should-salary-bands-transparent.html](https://www.citehr.com/234807-should-salary-bands-transparent.html)
- [https://www.citehr.com/48128-how-structure-salary-bands.html](https://www.citehr.com/48128-how-structure-salary-bands.html)
- [https://www.citehr.com/220364-need-create-salary-band.html](https://www.citehr.com/220364-need-create-salary-band.html)

Thank you.