Compensation Calculation Confusion: How Do You Handle Pay for Different Employee Levels?

vicky_rathod
Hello everyone,

Could someone please explain how to calculate compensation for employees at different levels?

Regards,
Vicky
Sujata Swamy
Hi Vicky,

You need to be more specific with your question.

Compensations depend on various factors like:

1. Industry
2. Experience
3. Qualifications
4. Nature of Job
5. Knowledge, Skills, and Abilities required for a job
6. Organizational Structure of your company - Manpower Planning, Budgets, etc.
7. Place of posting
8. Special requirements, if any...

You need to establish the above and do a study called Job evaluation, and then fix up compensations. These jobs are usually done by consultants specialized in this field. However, Market surveys may be available on the net, but the information could be outdated.

Also, most established companies have a defined grade and/or a cadre structure and a salary reckoner per grade which usually covers the above factors as a backup. But also, note that nowadays, most employers are looking at having a very lean organizational hierarchy and are limiting the same to not more than 4 or 5 levels. Both structures have their advantages and disadvantages.

It is a major subject that needs a lot of dedicated study.

Regards,

Sujata

Email: sujata.swamy@pidilite.com
kiran_namburu
Hi Sujatha,

I have attached a document that I prepared on salary breakdowns at different levels. It may be useful to you.

Kiran
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