How to manage new employee benefits and grading in People System

Just to confirm, where a customer is looking to store 'grading' when onboarding new employees, how is this best managed within People System where the 'grading' dictates where the employee sits within in the organisation and what benefit entitlement they have.

e.g. C-suite = level 0, Directors level 1, entry level HO level 5 etc.
 

Should this be managed via contracts?