Comment by deepinsand

Here's my experience:

- When you hire, you implicitly put people in a level which dictates what you're willing to pay them.

- People will always feel underpaid, and demand more $$. Without a system, you give them out arbitrarily.

- You now have enough people to add structure to the process. Do you base people's levels on their current salary? On their skill?

- What happens when people notice the discrepancy in pay or skill among a level? Especially if it's skewed by race, gender, etc?

I think you should have as many levels as pay-bands in your startup, which might be 6.