Definitely a very difficult question. The rule we used was that we'd rather have a known person we like stay and pay them extra than play the lottery as we bring up people. So as we hire, we recalibrate our understanding of the market and make sure to increase compensation accordingly. Another belief we held was that it is cheaper to give someone the increase before they ask for it. Which meant a competitive salary and an amazing culture. We were able to maintain it for our team post acquisition because some departures taught us just how much the market has changed in the beginning of 2021 and because of that were able to get through the great resignation mostly unharmed.

We did fail in making a clear rubric that we can use like what you're describing. Joel Spolsky has some guidelines since they have an open wage program. And I talked to the founder of Pariveda, he mentioned he was very proud of their system. So a couple of pointers you might be able to use. The one thing that we did find extremely useful was a summary description of what someone at a particular grade level is worth. Best of luck and look forward to seeing the solution you design