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All-in-one HR platform · v2.0
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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
A level in a pay structure that groups roles of similar size and sets a minimum and maximum salary for them, called the pay band. Grades keep offers and increments consistent, and show when an employee is paid outside the range for their role.
Pay grades are used at three moments: when making an offer, at the annual increment and at promotion. The recruiter checks the offered salary against the grade's minimum and maximum, and compensation reviews flag anyone sitting outside the range.
Example: in a grade with a range of ₹6 lakh to ₹9 lakh a year, an employee at ₹8.7 lakh has little room left, so a normal increment would push them over the ceiling. The options are a smaller increase, a one-time payment or a promotion case.
A common mistake is creating grades on paper but letting offers exceed them for every hard-to-fill role. After a year, the grade no longer describes actual pay, and internal parity complaints follow. Review exceptions each quarter and either revise the range or stop approving them.
A title describes the role, while the grade places it in a salary band. Several titles of similar weight can share one grade.
The minimum, midpoint and maximum salary for the grade. Where a person sits in the band reflects experience and performance.
Further increments slow or stop unless they move to a higher grade. Some employers pay a one-off lump sum instead of a raise to the base.
Roles are evaluated for their size and complexity, grouped into levels, and each level is given a band based on salary benchmarks and internal budget.
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