Salary Comparison Leading To Organisational Unrest

hi all,
Employee unrest is seen within the organisation due to employees being discussing salary amongst themselves(inspite of strict rules for not disclosing it)
the solution i suggested is to have fixed salary grades for each cadre of employees.. or have more specific designations..for eg.Sr.Developer, Jr.Developer etc and go accordingly(our organisation does not have an HR dept and i am in the process of setting up one)if the above solution is appreciated how should i go about it?
or What is your opinion on the above problem?
How do we decide the salary for employees? Any fixed polices?
Please suggest as soon as possible
Thanks

helo asha
according to me see we can t keep things secret for example u get ur pay slip and below that form u get that it is very secret not to disclose (even for md) but rember tis pay slip prepared for even the md is been in the hands of a accounts cleark .for me i dont like the idea of keeping anythin secret now as far as ur problem is concerned i liked ur suggestion but still can u get me a clearer picture of ur orgnaization structure and the pay to all this level (approx) so i can work on it..
regards
sachu

hi sachu
Thanking you for ur ready response.
There is no policy or criteria of fixing the salary or any policies regarding the grades here.(infact no policies are in place).
As of now we have five levels
MD
Project manager(15-20k)
Project leader(10-15k)
Team leader
Team member(Developers)
and other technical people like web designers, tech-writers and testers are common for all the projects.
hope this information is sufficient for u?
what are the steps to frame Salary policy? and any policy in general..Can anyone suggest any books or website regarding it
Please help

Salary structure is something that needs to be validated carefully - at least here - you want to ensure you are setting up your salary structure and job grades and bands to fall within your industry and area.
That way if employees question you on why ie. PM's are within a certain salary range you have your backup factual data.
Within each range you also want your median/midpoint and tie in the job description to how you determine an ee's salary.
there are lots of sites out there to help you- but you would want to start with your indusrty and area.
what industry are you in? if i have some information that matches i can send it to you.
cheers!
Rekha

Dear Rekha and everyone,
i am into an IT firm.It has a 27 technical employees and two non- technical people(admin,HR ) and one helper.Its a newly set up company.pls do help me in the Formulating salary poilcy? If you are aware of some sites or books pls inform me. How is it done in your organisation?How should i go about it? hope someone could guide me in this area.What are the various criteria that determine one is better than the other?
I am trying to set up a system here.i have been designing HRforms and letters,seperate personal files for employees.My next step is into recruitment activities followed by Performance appraisal.For my work to move on i need help in this salary structuring area
Thanks

Before you embark on setting a salary structure, you should establish Job Descriptions- some basis for the ranges.

Job descriptions will provide reporting relationships and list responsibilities for the position, as well as being a "talking point" in the recruitment and selection of future candidates.

The Job Description will contain:

The Primary Function (of the position)

Tools and Equipment Used

Materials Used

Source of Supervision

Direction Excercised (over others)

Working Procedure (step by step account of the job's major duties recorded in the order in which they are performed, or some other logical order and the results expected.)

Of course, Job Descriptions change over time with added/deleted responsibilities or with technological innovations. Nonetheless, they serve as a basis for salary ranges.

After Job Descriptions have been finalized (after interviews and reviews with the incumbents) and agreed to by the MD, the next step would be to select "Benchmarks", jobs in your organization that are common throughout the (IT) industry. Using these "Benchmark" jobs you can make a determination as to the appropriate salary range is compatable to your company.

I would suggest that you start at the lowest level and work up, but I see that someone has already begun the process [Project manager(15-20k)

Project leader(10-15k)], so you may have to use these as "Benchmarks".

The development and implementation of a salary structure is not an easy task. It requires the combination of practicality, logic, financial acumen, and support from the MD.

One last word of advice, I would not proceed to the other tasks - recruiting (unless absolutely necessary) and performance appraisals - until you have developed a salary structure based on Job Descriptions.

Dear Asha,
Salary comparision among employees is something that an HR personnel have not control on.
Yes you can creat an organisation sturcture which is grouped into X no of bands. eg
Directors
Management group.
Operation group.
Support group.
and so on.
But before u do this u have to have a clear picture on
what is co's growth in terms of turnover.........say 5 year down the line.
The expected manpower growth..............
The various type of Job work undertaken by the company.
The Job profiles for various positions..
The salary band existing in similar kind of industry.
Which are the Key & critical positions in the companys.
All the above aspects has to be looked into before create a company band.
Some of my points.
Leena Nair.
HR Specialist.

Hi Sachu,
I fully agree that salaries are not the best kept secrets and cannot be secrets. Secrecy leads only to more intrigue and discontent. If the policies with good clarity, then salary of any particular person could be expalined logically and with conviction.
does it sound too idealisitic situation?
Personally, i would like to have total transparency on salary.
bala

Dear Bill, Leena and all
Thanking you for sharing your knowledge with me. As per your suggestion i am starting my work by collecting Job description details. But, I would like to know more about the Benchmarking process?how should i go about it? is there any websites or books that you can suggest me on this topic?
Leena, Do you mind me sending the designed JD template for further guidence?If you dont mind, i would be grateful if you give me your e-mail id so that i can send the designed template of JD for this organisation.
Bill, i have got your e-mail id.Can i send the template to you so that you can guide if i am wrong?
Regards,
asha
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Hi,
I think you should First darw up a time frame highlighting the major activities and get support on that from the top mgmt. I'm saying this because I have done this entire process of creating a sal admin system and found that the top management support to the entire process is very very imp. Otherwise, it may be very difficult to sell the system.