To decide the salary structure, you need to take into account basically two factors. First, consider what percentage of labor costs is affordable for the company, and secondly, assess the number of jobs available so that you can equitably distribute that amount among various jobs based on their contributions.
Grouping Jobs for Salary Structure
You can begin by listing the jobs and grouping them into a maximum of 3 to 5 groups. The salary difference between these groups can be structured such that the lowest group salary is x, and the salary for the next higher group should be 110% x or 115% x.
Determining Total Salary Amount
Next, consider the total salary amount the company can afford. You can then easily distribute this amount into salary grades.
While there are many more minute details to consider, the above is the basic and most important aspect.
Regards,
Vibhakar Ramtirthkar
HR Consultant
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