There are several factors that can help you determine employee salaries, such as salaries in similar positions in the market, the financial capacity of your business, then you can calculate the basic salary for a position.
Generally, more experienced staff are always placed on a higher salary. That's to say that level of experience can b used to determine the salary of organisational staff.
In normal circumstances they check at the qualifications, experience and abilities for the given staff. There are other parameters that they should be checking on still.
First, they should have basic salary and based on the contract, they will get it. To increase their salary they should have shown good performance. If no, improvement but have shown satisfactory on monthly or yearly performance review they can get % increase.
First of all, it is the financial level of the company that determines salaries generally. Other factors as qualifications are used to determine salaries of individual staff.
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