How to Create a Fair Salary Grid When Employees with Same Titles Earn Differently?

Hello everyone,

I am working in the HR department of a small-scale company where there is no grade or band system, and employees have been working for a long time. People are receiving different salaries for the same designations in various departments. For example, the Purchase Manager is receiving 20k per month, while the Accounts Manager is receiving 60k per month, and the same applies to other designations as well. Now, my Managing Director wants me to create a salary grid. Please guide me through this process.

Thank you.

Grade and Salary Fixation

Grade and salary fixation is a complex exercise, and unless the whole profile of all employees is provided, it is not possible to offer a solution. With a significant variance in pay, you need to consider the qualifications, experience, and merit of the candidates when determining salary. It is essential to have an understanding of the pay scales in similar industries in the region.

Creating Grades for Designations

One suggestion I can offer is to create various grades for the same designation, such as Manager Gr. I, Manager Gr. II, etc. However, there may still be some individuals who do not fit into any specific grade. In such cases, special pay or personal allowances may need to be granted in addition to placing them within the fixed grades.

Determining Pay Grades and Scales

Yes, the suggestion by KK HR is a primer. Determine some grades (scales of pay) compatible with:

1. Minimum output, competencies, and skill sets per position (hierarchy level).
2. Prevalent pay scales for the same or similar work and level.
3. Above all, refer to the performance record of individuals holding posts in the same or similar designations/levels of responsibility/accountability.

As you proceed with your project, keep collecting ideas and suggestions. Expert help is inevitable.

Regards, Harsh K Sharan, Kritarth Consulting
28.5.2020