Compensation drives performance and sometimes the employees out of an organization! It hogs all the spotlight while setting the budget. Every possible analysis is drawn and implemented from the top to the grass root level. It triggers with the right sourcing, explaining the role to the candidate, identifying the fitments to the offering and requirement, of both the parties.
Employee orientation program, goal setting, quarterly and annual appraisal and every other measuring tactics attribute to an alignment of the talent and the organization, or sometimes the absence of it. Here’s a discussion of two employees, who have been working in Organization Y. This conversation takes place right after the appraisal. A little background, they were colleagues at Organization X.
Employee: I was promoted a year back, but no hike was issued as there was a change in the level. This was supposed to be enough motivation. The promotion was promised with a bonus amount to be disbursed in two installments. As the crow flies, the prize promised gets dearer. This is coupled with surmounting work pressure, it results in a heart-breaking appraisal.
Employee I: I got my hike letter on Monday, they gave me a 13.5% hike. There was a supposed market correction done this time. So I was expecting more apart from the fact that my promotion increment did not happen. They gave me the following reasons:
- The promo hike was already given when I got promoted that was a 12K hike annually.
- The market correction is included in this hike.
- Rating wise this is the hike I should be getting.
Employee II: What about the bonus? Were you not told you are receiving the highest bonus in the team, just because you were the top performer?
Employee I: Yes, I was told, the bonus will be paid in November. So I had a mature but heated conversation with my manager. He came down to say that the only option he sees for me to get a hike is by getting another job.
Employee II: That’s odd! You will have to work throughout the year for that! Ah, I get it. He doesn’t have the budget, I guess.
Employee I: He gave the associates about 30-40% hike. The other team leader he gave her a 23% hike. The reason being they were on a lower salary. I made my stand very clear I told him this is unacceptable.
Employee II; Ohh, I know how this works. It was done this way at organization X. Do you remember the broad banding there?
Employee I: Yeah the market corrections exercise!
Employee II: Take a breath. They have done what suited them the most in terms of parity. You have your options clear. You are not married to this job. However, NEVER show this attitude at work. Make sure to stay extremely pleasant and calm. Your discussion is over, now it’s your time to act.
Employee I: I have taken the following steps:
- I am due for the next installment of retention bonus in June. I told him I refuse to take this and sent him a formal mail on this.
- I asked him to move me to a day shift. I told him I cannot compromise, based on this salary in night shifts.
Employee II: Good, you have set your limits. Initially, he will show dissent but will be quipping about it in the long run. He will want you to calm down to be back in the ring.
Employee I: Yeah, he gave me the big picture saying, they will need leaders by next April. I stand a good enough chance. Even so, he also mentioned that my salary will not increase beyond 10-13 %, even then. He has been doing this since a long time.
Employee II: Sure enough, why not! Listen to him, but remember, he would have his limitations. You are an HR, you know how it works
Employee I: Nevertheless, finally I told him, I will think about it. My options are open as of now. Yes I do understand compensation management.
Employee II: You have already been trying for a new job. Give yourself at least six months. Don’t lose out on the bonus until and, unless the hike outside equates it.
Employee I: Yes that is the plan, but I really want to get a good salary. How long will I struggle with a less salary. It’s not that I am not putting the efforts here. I have worked three shifts back to back! Some of the associates below me are getting a higher salary.
Employee II: Chill, moving on to a higher salary level, on the same designation band, will make them extinct, and you know that. Rather use this as your tool. You have worked as a TL for more than a year now.
Employee I: Yes, I have been convincing myself and being patient. It’s high time I start enjoying my salary as well.
Employee II: Give yourself at least six months to fish the best offer. Don’t let anything drive you nuts. You have set limits at work. Remember, the way to higher salary is never through the highest band. It’s through making the right moves.
Employee I: And guess what? this friend of mine, who is also a team lead, got a 23% hike. She wanted to quit or be transferred to the Head quarters. That’s where she is, from here she was transferred- a part of the process there to retain her.
Employee II: Freeze yourself for a job search. Keep a cool head to negotiate. The next employer needs to find you good.
Soul searching for employers
Productivity is fueled by rewards. Compensation is designed to equate the effort. Where does the fissure begin and how to hold on, when things are falling apart?
- Russian roulette: Budget for the salaries remains fixed. Bell curves will accommodate the employees to disburse the hike percentage. Distribution of the goodies within the talents will remain a game of Russian roulettes. Robbing peter to pay Paul will end with Peter looking for greener pastures
- Taming the sky-high expectation: Allocate work, weighing expectation simultaneously. It’s better to set the limits rather than painting a rosy picture with empty promises of promotion, which remains a distant reality.
- Parity breeds contempt! Parity in compensation is a process, a means to an end. Market correction for salaries is aligned with employee’s motivation. Different strokes for different folks. It will remain perpetually difficult to meet the expectation of every employee. However, an attempt to benchmark employees with it should be done judicially. Offering some employees hike and the rest bonus, inorder to retain them is a tactical wayout.
- Up or Out: Salaries will remain fixed within the bands. This will cycle talents in the role. Up or out, remains the golden rule. Employers would use this strategy to measure performance, whereas employees will use it as a tool to seek greener pastures! If more salary or growth doesn’t happen within the company, seek else where .
Chicken soup for the employee’s soul
- Here and now: Keep your expectations clear to what you need now and stop comparing what you thought was important to you a year back!
- ReWARds : Remain eternally greedy for rewards, when you are allocated tasks endlessly and prepare yourself for a heart break. Take responsibilities, only when there is no longer any greed to cash them, for a higher salary. This is as impossible as it sounds. You definitely don’t go to the office for charity. Every service that you deliver has to be equated with the pay. Now before you kill yourself, with your perception of ‘pay’, take a hard look. Is running mad because of this, more important to you? Alternatively set a long term strategy to build capability and let the compensation be a result of it. Don’t make this sound to you as ‘gyan’. However, use your intelligence to build your focus and not to wear you down. Constant strife at work, resulting from an unexpected low pay would drown both the parties equally.
- Vision board: Look at the bare minimum and then work towards the highest goal. At the same time, remember, the rewards and compensation still depend on factors beyond your control. You will not draw the parity in your organization or decide on the budget for the bell-curve. You may have the plans to buy a house, car, etc. Its not a crime to weave such dreams, but do not make that an excuse to direct your growth. Your career is much larger and goes beyond the material comforts.
- Must do: You have to make yourself the compelling product, let the premium price be a result and not the goal! Every employer would want to hire a competent employee. Scrutinize your offer to reinstate that. Higher pay is through re-skilling, up-skilling and added certifications. Train your way to the next level job.
Angela Lee Duckworth, et.al., in their research paper ‘Role of test motivation in intelligence testing’ proved that performance enhances when motivated with rewards and assessed with tests frequently. This study worked at an elementary level, as students don’t have an option to change their schools if they did not like the rewards. At the same time, assessments were universal. Hence it would make a little difference, even if schools were changed. Moreover, teacher’s guidance is not met with the same scrutiny, with which the Manager’s appraisal feedback is taken.
The balance remains when choices are few for the employers and employees. There is no quick fix alternative, other than understanding and aligning to function, this machinery.