Wage grade is a factor in the financial compensation methods of employment. It is commonly used in both civil and military public service, but also for private sector companies. The pay scale simplifies the employment process by offering a fixed salary system as opposed to open negotiations. In short, fill in the grade to include two dimensions: a “vertical” category where each level will relate to the responsibility and the requirements for a particular position; This scale is "horizontal" to allow for financial incentives that reward the quality of employee performance or length of service. In this way, an employee progresses in the horizontal and vertical categories when regularly evaluated positively. In most cases, the assessment is done annually and involves more than one method.

In the six CPC, the concept of grade pay was introduced by the central government. While condensing so many cadres in group A, B, C and D, the commission introduced grade pay for the respective cadres. While fixing pay, the element of grade pay is also reckoned. In the condensed cadre system due to duties and responsibilities devolved on a cadre, there was a difference in the grade pay component. But For this slight difference, the minimum and maximum of the time scale remain the same. Obviously, there are anomalies amongst juniors and seniors as latter in some cases get lesser pay than their juniors. Also in the lower cadre, some juniors get higher salary than seniors in the higher cadre. This is applicable to pensioners also. Anamoly committee has to look into this early as seven CPC has come.

The salary structure of government employees is set up by the central government under the Pay Commission. At present 7th Pay Commission is in practice, which was implemented on 30th January 2018. In each decade government of India review the salary structure of government employees by setting up the Pay Commission, which recommends pay structure for military and civil government employees of India.

As per the 7th Pay Commission, pensioners got 23.63% raise in their income, while the current serving employees got a 16% increase in their salary. However, the biggest rise was 63% (approx.) for allowances. It has been made after considering the demands of employees coming directly under the 7th Pay Commission.

As for the latest updates under the 7th Pay Commission, the Central government has hiked the Dearness Allowance by 3 per cent. In addition, the Railway Ministry has also constituted a committee to include some new categories within Risk and Hardship Allowance. The retirement age of employees from the rank of Constable to Commandment is also to be increased from 57 years to 60 years.