Though you have not mentioned whether the grading relates to blue-collar or white-collar employees, I will register my views for both categories.
Blue-collar: Monitoring, assessing, and administering grades will be a real challenge, as monetary increases generally take precedence over grade progression in this category.
White-collar: While the challenge to monitor, assess, and administer will still be present, grade elevation, in addition to monetary increases, could be a factor in retaining potential employees.