Steps
- List your roles and group them into grades by the size of the job, not by the person who holds it.
- Collect market reference points for a few benchmark roles in each grade and write down the source and date for each.
- Set the midpoint of each grade from your pay philosophy, for example [match / below / above] the market reference for the benchmark roles.
- Set the minimum and maximum around the midpoint. Spread = (maximum − minimum) ÷ minimum.
- Check that adjacent grades overlap by a sensible amount and that midpoints rise from grade to grade.
- Place every employee in a band and review those who sit outside it.
Band table
| Grade | Roles in the grade | Minimum (₹ per year) | Midpoint (₹ per year) | Maximum (₹ per year) | Spread |
|---|---|---|---|---|---|
| [G1] | [Examples] | ||||
| [G2] | [Examples] | ||||
| [G3] | [Examples] | ||||
| [G4] | [Examples] | ||||
| [G5] | [Examples] |
Market reference log
Say which pay element each figure covers (fixed pay, total cash, CTC) and compare like with like.
| Benchmark role | Grade | Source | Date of data | Reference figure (₹ per year) | Note |
|---|---|---|---|---|---|
| [Role] | |||||
| [Role] | |||||
| [Role] |
Placing employees
Compa-ratio = employee's annual pay ÷ band midpoint. Position in band = (pay − minimum) ÷ (maximum − minimum).
| Employee | Role | Grade | Annual pay (₹) | Compa-ratio | Position in band | Action |
|---|---|---|---|---|---|---|
| [Name] | [None / Review / Hold] | |||||
| [Name] | ||||||
| [Name] |
Rules to write down
Use pay figures only within the people who have a need to see them, and talk to your legal adviser if bands change the terms in existing contracts.
- Pay for new hires is offered within [lower part / the whole] of the band, with approval above [level].
- How people below the minimum are brought up, and over what period.
- How people above the maximum are handled: pay held, one-time payments or a move to the next grade.
- Who owns the bands and how often they are reviewed: [Owner], every [number] months.
- How exceptions are approved and recorded.
A starting point, not legal advice. Check the final wording against your contracts and the rules of your state, and have a qualified professional review it before you issue it.