My department and college have rules as to how much certain people can be paid. There are set salaries (with a very narrow window around each) for the different seniority levels of research scientists.There is a set salary for a full-time postdoc; you can’t pay them more and if you must pay them less, then it’s not a full-time appointment, and you have to justify why it’s less and you cannot ask them to work over the corresponding number of hours per week.

As of a few years ago and in order to become more competitive for grad students, the college and department have adopted a tiered system for grad-student compensation: there are now several different levels of graduate-student research assistantships (based on seniority and merit) and two levels of teaching assistantships. with $2-3k per annum between successive levels.

I’ve always paid all my graduate students the same, but I am now considering, for the first time, bumping two people up in pay based on merit. They are significantly better than others; one is senior, so no one would object to this student being bumped up, but the other one is junior, and some students more senior than this one wouldn’t be getting the bump.

However, I worry what this might do to morale, if there would be issues with favoritism and whatnot.

What do you say, blogosphere? Principal investigators, do you pay all your graduate students the same or are there seniority and/or merit-based differences? Do these inequities ever come up and, if they do, how do you deal with them? Graduate students and postdocs, are there differences in pay among your cohort and, if yes, how does everyone involved deal with it?