How Can We Streamline Our Salary Structure Without Outsourcing? Seeking Advice on Starting the Process

Dear All,

Greetings!

I work for a leading mineral water company in the HR department. It has been a good experience so far; however, I feel there is a strong need for the department to systematize its salary structure. Can you please help with how to initiate the salary slabbing process? I also would like to know the exact process flow chart for this exercise.
Usually, they say this activity is outsourced, but I feel consultants usually end up doing things after our inputs. In that case, why can't we do the groundwork and give our seniors to decide on this? Eventually, whatever the salary trend is in India, companies pay only what they can afford.
As of now, we make the CTC as per the grade. For example, basic between 1200-4000 is grade A-1, 2500-5000 is grade A-2, and so on. But this grade differentiates only the basic and nothing else. I want departmental salary slabbing and, above all, designation salary slabbing.
Please help me with this activity.

Regards,
Reena

P.S. Please mark a cc of your replies to reflectionz2002@yahoo.com

Hi Reena,

Sorry for the delayed response. Anyways, I am providing you with some ideas to prepare the same.

CTC includes every cost in terms of money and materials. Some of the components are:

- Gross Salary
- Bonus
- PF Contribution from the employer's side
- ESI or Medical contribution from the employer's side
- Cell Phone Allowance
- Hard furnishing goods
- Food coupons

The contents of the salary breakup are as follows. You can prepare it to suit your needs. HRA would be 50 or 60% of the basic.

- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per Month

Gross Per Month = Sum of all the above.

Gross Per Annum = 12 * Gross/Month

PF Contribution = 12% of Basic/Annum

ESI Contribution = 4.75% of Gross/Annum

Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10,000/Month. Amounts exceeding this will be covered under Mediclaim or will depend on company policy.

Annual Fixed Gross Cost = Gross/Annum + PF + ESI + Med

Ex-Gratia/Bonus = A fixed amount as a bonus

Annual Total Cost = AFGC + Ex-Gratia/Bonus

Annual total cost is also referred to as CTC.

I hope this clarifies things for you. Feel free to ask if you have any queries.

Regards,

Amit Seth

Hello Members,

Approximately 100 views and no answer. I am sure I have fellow members who are much more experienced and senior, and who do not mind sharing their knowledge with me.

I also want to clarify that I do not need a CTC breakup. I wish to know how an organization determines different salaries for various designations across departments.

Regards,
Reena
reflectionz2002@yahoo.com

Dear Reena,

Sorry for the late reply. So, you want to understand the process of salary structuring. This is typically determined after conducting a market survey to evaluate the prevailing rates for a particular profile. Additionally, when creating the salary slab, we also take into consideration the company's financial strength to assess its capability to pay.

Moreover, the salary structure is usually designed based on the educational qualifications, work experience, and skills required for the specific job profile.

Regards,

Amit Seth

Dear Reena,

Sorry for being late, but could you please send the same to me at the following email address? Once I reach my office, I will send it to you at the earliest.

Regards,
Shailendra

Hi Reena,

I totally agree with Amit. Your company might have defined roles and responsibilities for the particular position within the concerned department. It would be advisable to first categorize them by department, then by designation, and subsequently based on the desired experience and educational background. Finally, determine the salary range for each category.

Regards,
Revathi

Hi,

The minimum bonus will be paid at 8.33% as per the Payment of Bonus Act, 1952, and increments will be based on the company's HR policy in accordance with labor laws.

Warm Regards,
Maniksing