Dear All,
I am in the process of realigning the office grading structure for an IT software company. I am wondering if it is correct to have a department-wise grading structure or if I would require to work out one single banding structure across the company.
Earlier, my company had a few designations assigned to the grades, but now, as we are growing, I am required to add more designations and realign the grading structure.
Also, does each grade (e.g., Grade E) require the same number of sub-grades? For example, should Grade E (executive level), Grade M (managerial level), Grade L (leadership level), etc., have an equal number of sub-grades like E1, E2, E3 then M1, M2, M3, Grade L1, L2, and so on? Or is it okay if we have Grade E1, E2, E3 and M1, M2, M3, M4, M5, and L1, L2, L3? In the middle level, there are more designations and pay scales that we would like to band separately.
I understand that grades are banded based on salary/pay scales, which is why I am looking to understand if, since in an IT company, the Technical/Development departments are the highest paid compared to support/HR/Admin/Finance teams, a department-wise banding structure can work.
I have attached the file for review and better understanding.
Looking forward to your kind advice and comments.
Thanks!
From India, Mumbai
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7I am in the process of realigning the office grading structure for an IT software company. I am wondering if it is correct to have a department-wise grading structure or if I would require to work out one single banding structure across the company.
Earlier, my company had a few designations assigned to the grades, but now, as we are growing, I am required to add more designations and realign the grading structure.
Also, does each grade (e.g., Grade E) require the same number of sub-grades? For example, should Grade E (executive level), Grade M (managerial level), Grade L (leadership level), etc., have an equal number of sub-grades like E1, E2, E3 then M1, M2, M3, Grade L1, L2, and so on? Or is it okay if we have Grade E1, E2, E3 and M1, M2, M3, M4, M5, and L1, L2, L3? In the middle level, there are more designations and pay scales that we would like to band separately.
I understand that grades are banded based on salary/pay scales, which is why I am looking to understand if, since in an IT company, the Technical/Development departments are the highest paid compared to support/HR/Admin/Finance teams, a department-wise banding structure can work.
I have attached the file for review and better understanding.
Looking forward to your kind advice and comments.
Thanks!
From India, Mumbai
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Dear All, Would sincerely appreciate your kind advice and guidance on this as it is important for me to close on the grading matrix for my company. Regards,
From India, Mumbai
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From India, Mumbai
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Dear Priya,
Greetings!
I am not aware if you have done a proper job evaluation before deciding on grades because that would have made assigning jobs to grads a lot easier for you.
Having said that, you need to understand that grading is nothing but a tool for fairly compensating employees and managing the payroll. There is no need to have a complex grading structure. I am personally in favor of having a single grading system for the whole organization and not for separate departments. This is for the reason that you will have ease in slotting of jobs and your system will be transparent. For example: You may have a VP HR and VP projects. Even if these two may not have a reporting relationship, in case of a single structure, they will clearly be aware of where they stand vis-a-vis each other, in terms of hierarchy. In the case of department-wise grading structure, that will be ambiguous.
The idea of having sub-grades is very useful because salary grades are extremely fluctuating, and sub-bands give you a wider salary range.
You need to keep in mind that there are not a lot of rules for the grading system. Since the grading system is linked to salary, which is an emotional subject, there are bound to be disputes. The problem seldom lies with the grading structure; it is almost always good management practice. Make sure that you slot jobs to grades in a transparent, equitable, and open manner. Having some kind of appeal process for ambiguity also goes a long way in avoiding disputes.
From India, Delhi
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Greetings!
I am not aware if you have done a proper job evaluation before deciding on grades because that would have made assigning jobs to grads a lot easier for you.
Having said that, you need to understand that grading is nothing but a tool for fairly compensating employees and managing the payroll. There is no need to have a complex grading structure. I am personally in favor of having a single grading system for the whole organization and not for separate departments. This is for the reason that you will have ease in slotting of jobs and your system will be transparent. For example: You may have a VP HR and VP projects. Even if these two may not have a reporting relationship, in case of a single structure, they will clearly be aware of where they stand vis-a-vis each other, in terms of hierarchy. In the case of department-wise grading structure, that will be ambiguous.
The idea of having sub-grades is very useful because salary grades are extremely fluctuating, and sub-bands give you a wider salary range.
You need to keep in mind that there are not a lot of rules for the grading system. Since the grading system is linked to salary, which is an emotional subject, there are bound to be disputes. The problem seldom lies with the grading structure; it is almost always good management practice. Make sure that you slot jobs to grades in a transparent, equitable, and open manner. Having some kind of appeal process for ambiguity also goes a long way in avoiding disputes.
From India, Delhi
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CiteHR Members: 21.7.2014
SUB: CATEGORISING / Grading OF EMPLOYEES BASED ON QUALFICATION, EXP. & SALARY.
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CATEGORISING / GRADING of every Employees Designations in an Organisation (especially, Labour Intensive Mfg. Cos. Steel, Cement, Mines etc.,) from Kalassi / Peon to GM/Director (i.e., Un-skilled to Top Management) is an important task of HR Dept. tobe done in such a way that; every employees Qualifications, experiences, salaries are taken into account to avoid complaints of anomaly.
Also, it needs tobe done carefully and properly that the HR Dept. staff who have to prepare Annual Increments, Promotions, Fitment, Benefits Orders etc., are able to understand the Categorisation so as to programme it in Computer while making such Increment, Promotion Orders with Salary, Grades for thousands of employees at a stretch in big labour intensive Mfg. Companies.
The Salaries are tobe fixed in such a way that employees in each grade has a particular salary range in a descending order say; from Sr.Manager down to the Un-skilled employees. Such Categorisation helps HR Dept. to group all employees from Un-SK to Top Mngmnt. and it is required for HR, MIS Reports & for filing various Returns. It will also help Interview Panel Members to fix a particular Candidates Designation in a Grade matching to his salary & post for the new candidate considering his Qlfn. & exp. vis--vis existing employees in the particular Dept. to which the new employee is going to join / recruited; to reduce heart-burning and anomaly problems among existing employees later.
Salary fixation (as in many other cases) depends upon Demand & Supply. A fixed range cannot remain for ever. For ex: a HR Manager with 10 yrs.exp. gets 5 lac/anum in X Co, will shift to Y Co. if Y Co. offer 6 lac & again to Z Co. who may offer 8 lacs. Rarely, people accept new Co. with lesser salary unless, it is close to his native place or his wife or other compelling reasons.
Salary fixation for each employee (based on Qlfcn, exp. & job knowledge) is one aspect whereas fixing his Grade/Category depending upon his Designation is another. The 2nd one i.e., Categorising/ grading/ grouping say 1000 employees into various grades is important to say how many Engrs./Officers, Managers, Mechanics are there at a particular time. State Laws require Filing of Returns to District Industries Centre where Company has to state how many people of the Particular State are given jobs;- Category wise, say Skilled, Supervisor etc., In Karnataka, every Company has to file KANNADIGAS Report to provide statistics of Kannadigas employed in Manpower Returns - Quarterly.
I have attempted to Categorise all employees Designations as under (from Un-SK to Top Management in XL format) so that every employees Designations in a Labour Intesive Units like Steel Plants; are covered in Ascending Order; starting with
Un-Skilled,
Semi-Skilled &
Skilled . . (Skilled - 4 Levels like Jr.Optr, Asst.Optr, Optr & Sr.Optr.)
Supervisory (4 Levels - Jr.Supervisr, Asst.Supervsr, Supervisr & Sr.Supervisor)
Officers/Engineers (4 Levels Jr.Offcr/Jr.Engr, Asst.Ofcr/Engr, Ofcr/Engr, Sr.O/Sr.Engr.)
Managers (7 levels Jr.Manager, Asst.Mgr, Dy.Mgr, Manager, Sr.Manager, AGM & DGM)
TOP MANAGEMENT (5 Levels GM, SR.GM, CGM, AVP, VP, CEO, PRESIDENT, DIRECTOR, E.D. & M.D.)
However, the Categorisation, Levels & Designations could be changed as per the Organisations needs & nature of Industries. The position is different in Software & other type of Companies compared to Steel, Cement etc., as stated above.
As Salaries will vary depending upon Qlfcn, Exp. location, type of industry etc., the same can be grouped to fit into appropriate grades. I request respectable Cite HR Senior Members to peruse the above and provide us (in a Statement Form) the types of Categorization / Grading of all Designations available for the benefit of HR Managers who need such List not only for their works but also, for convincing Senior Management whenever Salary, Designations are to be reviewed / re-fixed. Even though there may not be fixed norms for revision or change, it will be helpful if Seniors provide some Formats / Guidelines which will be showing Categorization / Grading of all designations for better presentation as there is a saying; something is better than nothing. This will help many HR Professionals just like Standard quotations / specifications, Comparative statements with rates for products like Car, bike etc.
I request Cite HR Sr. Members to give more information on this important aspect of HR to help HR Managers for categorizing the employees for various HR & MIS Reports and also for Recruitment teams.
Yours sincerely,
C.Neyim, HR Consultant, Ex:AGM (HR&A), VSL Steels Ltd., Hiriyur, Chitradurga, Karnataka, S.India.
Mobile - 9535470460 EMail:
From India, Bangalore
Acknowledge(0)Amend(0)
SUB: CATEGORISING / Grading OF EMPLOYEES BASED ON QUALFICATION, EXP. & SALARY.
---------------------------------------------------------------------------------------------------------------------------------------
CATEGORISING / GRADING of every Employees Designations in an Organisation (especially, Labour Intensive Mfg. Cos. Steel, Cement, Mines etc.,) from Kalassi / Peon to GM/Director (i.e., Un-skilled to Top Management) is an important task of HR Dept. tobe done in such a way that; every employees Qualifications, experiences, salaries are taken into account to avoid complaints of anomaly.
Also, it needs tobe done carefully and properly that the HR Dept. staff who have to prepare Annual Increments, Promotions, Fitment, Benefits Orders etc., are able to understand the Categorisation so as to programme it in Computer while making such Increment, Promotion Orders with Salary, Grades for thousands of employees at a stretch in big labour intensive Mfg. Companies.
The Salaries are tobe fixed in such a way that employees in each grade has a particular salary range in a descending order say; from Sr.Manager down to the Un-skilled employees. Such Categorisation helps HR Dept. to group all employees from Un-SK to Top Mngmnt. and it is required for HR, MIS Reports & for filing various Returns. It will also help Interview Panel Members to fix a particular Candidates Designation in a Grade matching to his salary & post for the new candidate considering his Qlfn. & exp. vis--vis existing employees in the particular Dept. to which the new employee is going to join / recruited; to reduce heart-burning and anomaly problems among existing employees later.
Salary fixation (as in many other cases) depends upon Demand & Supply. A fixed range cannot remain for ever. For ex: a HR Manager with 10 yrs.exp. gets 5 lac/anum in X Co, will shift to Y Co. if Y Co. offer 6 lac & again to Z Co. who may offer 8 lacs. Rarely, people accept new Co. with lesser salary unless, it is close to his native place or his wife or other compelling reasons.
Salary fixation for each employee (based on Qlfcn, exp. & job knowledge) is one aspect whereas fixing his Grade/Category depending upon his Designation is another. The 2nd one i.e., Categorising/ grading/ grouping say 1000 employees into various grades is important to say how many Engrs./Officers, Managers, Mechanics are there at a particular time. State Laws require Filing of Returns to District Industries Centre where Company has to state how many people of the Particular State are given jobs;- Category wise, say Skilled, Supervisor etc., In Karnataka, every Company has to file KANNADIGAS Report to provide statistics of Kannadigas employed in Manpower Returns - Quarterly.
I have attempted to Categorise all employees Designations as under (from Un-SK to Top Management in XL format) so that every employees Designations in a Labour Intesive Units like Steel Plants; are covered in Ascending Order; starting with
Un-Skilled,
Semi-Skilled &
Skilled . . (Skilled - 4 Levels like Jr.Optr, Asst.Optr, Optr & Sr.Optr.)
Supervisory (4 Levels - Jr.Supervisr, Asst.Supervsr, Supervisr & Sr.Supervisor)
Officers/Engineers (4 Levels Jr.Offcr/Jr.Engr, Asst.Ofcr/Engr, Ofcr/Engr, Sr.O/Sr.Engr.)
Managers (7 levels Jr.Manager, Asst.Mgr, Dy.Mgr, Manager, Sr.Manager, AGM & DGM)
TOP MANAGEMENT (5 Levels GM, SR.GM, CGM, AVP, VP, CEO, PRESIDENT, DIRECTOR, E.D. & M.D.)
However, the Categorisation, Levels & Designations could be changed as per the Organisations needs & nature of Industries. The position is different in Software & other type of Companies compared to Steel, Cement etc., as stated above.
As Salaries will vary depending upon Qlfcn, Exp. location, type of industry etc., the same can be grouped to fit into appropriate grades. I request respectable Cite HR Senior Members to peruse the above and provide us (in a Statement Form) the types of Categorization / Grading of all Designations available for the benefit of HR Managers who need such List not only for their works but also, for convincing Senior Management whenever Salary, Designations are to be reviewed / re-fixed. Even though there may not be fixed norms for revision or change, it will be helpful if Seniors provide some Formats / Guidelines which will be showing Categorization / Grading of all designations for better presentation as there is a saying; something is better than nothing. This will help many HR Professionals just like Standard quotations / specifications, Comparative statements with rates for products like Car, bike etc.
I request Cite HR Sr. Members to give more information on this important aspect of HR to help HR Managers for categorizing the employees for various HR & MIS Reports and also for Recruitment teams.
Yours sincerely,
C.Neyim, HR Consultant, Ex:AGM (HR&A), VSL Steels Ltd., Hiriyur, Chitradurga, Karnataka, S.India.
Mobile - 9535470460 EMail:
From India, Bangalore
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SALARY STRUCTURE & GRADING.xls
Creating a Competitive Salary Structure.doc
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(Fact Checked)-The user reply contains accurate information and provides valuable insights into grading structures, salary bands, and job evaluation. Well done! (1 Acknowledge point)