What is your salary expectation? - III

In this posting, I am going to write on the same topic, but from employer's perspective.  Here goes my thoughts on, as an HR, how to approach CTC fitment so it does not create any ripples or less ripples internally.

1) Ensure internal parity:  

Not all organizations could be or need to be a top pay master which means you are not on the top percentile on the salary front in the market.  As long as the gap between what you pay and what is offered in the market is not wide enough to push employees out, it's fine. This is external parity.

Two persons doing the same kind of job should get similar or comparable salary. That's what is internal parity.   

“Employees may tolerate even external disparity but not internal disparity. Internal disparity is a sure recipe to trigger dissatisfaction, demotivation and attrition.  Any internal disparity is bound to have ripple effect in the organization.”

In one of the manufacturing industries that I worked, we on-boarded a Purchase Manager to lose in 3 months’ time.  He came from another large manufacturing industry and everything looked perfect. His salary was lesser than someone in his team which he got to know in less than a month.  Imagine a scenario wherein your salary is lesser than someone who reports into you.  He quit in few months month and obviously the internal salary disparity was the only reason. 

“When you hire someone, do compare him with your best performers in the same role and ensure that the salary is comparable to them.”

2) Perceived internal disparity:  

Sometimes internal parity may not really exist but it could crop up on employees’ mind which is perceived Internal disparity.  In of the organizations where I worked, there was a dedicated trainers team supporting the production. Their primary responsibility is to understand the project and then train the production staff. The trainers were primarily graduates and they were working for about 3-4 years and doing a good job. When the company wanted to revamp the training team, they brought in few MBAs whose experience was lesser and salary was on par with the existing Trainers. It obviously resulted in lot of resentment and demotivation.  But, the MBAs were good and their performance was certainly much better.  Seeing MBA’s performance, the other trainers understood and accepted what they lacked and what they needed to improve.  Few left. Others stayed back. Many scaled up their training skills to match with the MBAs. This was a very tricky and sensitive scenario but we kept our doors open and addressed each and every grievances with care.

Another simple example that all of us can relate to - I’ve come across / I come across this scenario very frequently. When two employees in the same role at the same time,  they assume that both are in the same performance level. When one person gets promoted or gets more salary increases, the other person gets disappointed and he tends to think the company is biased. The only way to break such perceptions is to practice transparent communications. Instead of ignoring, do encourage such employees to approach, hear them out and show performance data.  I've seen employees quitting on these grounds.  

3) Candidates who’ve already got an offer:  

To me, they are more of money oriented and less of career oriented and they show no ethics.  They will add to you attrition data that everyone wants to bring it down.  Future behavior can be predicted from the current of past behavior.  So they may not hesitate to show your offer to someone else to negotiate much more or they may not hesitate to quit early just for monetary reasons. Hence reject them.

4) Check Role fitness or readiness: 

This is basically to check if the candidate would be productive to the expected level right from the day 1 or employable but needs some hand-holding and guidance or trainable which involves learning curve and time. CTC needs to be decided based on where the candidate stands in these 3 categories and it need not be based on the candidates last drawn CTC.  No choice is a bad choice and it depends on the Business priority and requirement.

5) Hiring someone who is already getting his salary on the higher side. 

Not a good idea for retention.  Since he is already on the higher side, there is less scope for giving higher increases year on year and retain him. Go ahead only if it is the need of the Business.

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