Tuesday, June 5, 2007

Are you really paid enough?

I keep on reading complaints from the company HR in Indian companies about the attrition problem they are facing. They blame employees of being very impatient and leaving companies for short term gain.

Also, the employees complain about the problems they face in the companies, which most people can not raise to the HR (for whatever reason) and those who raise do not get satisfactory reply. They simply end up being frustrated and start complaining about the company policy.

I have been looking around for the ground reasons for this problem for sometime now. I am pouring down those views here. Please read this disclaimer below before reading the whole posts. I don't want to rise any controversy, but if it creates hope that will do something good only.

"The views are entirely my personal views and they in no way represent the view of the company I am employed with."
"The views are not targeted against any company, Institute or Person. If it happens to attack someone interest, it can only be the coincidence."

"These are my views now and I may change in future. My views keep on changing with time and I consider it to be the consequence of having an open mind."

The aim for any candidate is to grow personally and professionally. And aim for the company is to satisfy the investors while keeping the employees interest intact. But there seems to be mistakes from both the sides, candidates do not analyze anything before joining and start complaining later on, and companies tend to ignore the emotional part of the employees.

First employees need to think and analyze before joining any company and much of the information are readily available if they make slight effort. The candidates must find following information about the job and company before joining.

1. Job profile
2. Pay package across different bands and open disparity, if any, in pay package for same posts for reasons (like different pay for candidates of different Institutes)
3. Work Culture (shifts or not, suitable work time, work from home facility etc)
4. Work Environment (friendly people)
5. Company's brand name (people friendly or investor friendly, both or none)
6. Company's financial performance
7. Growth of people in general

Once he has all these information, he can choose the company that best suits his interest. I have seen many people complaining about these thing once they are in, which is not good. When he moves out of a company for one or the other reason, company is losing huge investment while giving training to him and in turn he is losing his precious time. He could have used it more productively in some other company rather than in searching jobs, sleeping in training classes, chatting with friends while at bench, complaining about the company policy or exploring further study options. The further study option looks good but it is not always, it matters if someone is going because of frustration from the company (or industry) or going to chase his ambition. Later is good. But if someone is going for further study due to one or the other frustration, then he will be in the same trouble once again after completing next level of study. Ultimately all need to get back to the industry and work.
Any degree is not the goal but it is the weapon to master the job and gain happiness and satisfaction in life.

In turn the company HR needs to be proactive in identifying the needs and aspirations of the candidates. They need to follow the market trend but also must not do anything that hurt emotional feeling of the candidates. Most people leave the company if played with their emotions. Today companies look at following things:

1. Are people really paid enough?
2. Are our insurance and other benefits at par our competitors?
3. Is bond to retain or people can be believed?

But one thing companies tend to forget. That is, to analyze whether or not people are emotionally comfortable with the package provided to them. Most importantly, it is important to know, "Are they accepting the offer happily?"

I have few case studies with me here.
1. One company hired people from IITs for Business Analyst posts and people from NITs for Associate Business Analyst. There is a pay difference of more than 2 Lacs. Training and work on job were the same.
2. One company hired few people from campus giving higher package than the current employees at the higher level. The reason from the HR was simple, market dynamics. They would not get anyone from IIT campus for lesser amount.

I don't want to name these companies here. But want to discuss the effects of those short-sighted HR policy. The effect of this disparity was hazardous. Both companies end up losing more than 50% of the employees.

Let us analyze these scenario. First case directly made two groups in the company, IIT group and a non-IIT group causing huge problems for the management to make them work together. NITians felt they were not given fair offer. The IITians in return found themselves in the privileged group and never got any challenge for performing their best in the company. Most people then started working in the company as time pass to make their resume look good for six months to one year while planning a high profile exit. Mostly they were working in the company to prepare for management entrance tests or to try for other companies for higher salary etc. and the days passed by. No candidates rise the issue to the management or HR.
Suddenly a time came when people started resigning. After seeing many resignation letters, HR ultimately thought seriously about the issue and went forward increasing salary for a candidate who was moving out. They proposed a post appraisal along with salary hike. He stayed back. But the problem intensified as people felt resignation as the medium to bargain for higher benefits. The solution was again short-sighted.

The second case is more hazardous. When the new joinees came to know about the salary of their seniors, they lost enthusiasm in work. They didn't see good prospects within the company and they started thinking about the alternative. On the other side, the seniors were not ready to teach their juniors. Most of them were planning for exit, and few were fighting their case with the management. Result, almost all the good performers left the company.

What does this two case studies tell the company HR?

They should think well out of the facilities basket and have proper respect for the emotional cause of the employees. And if they can form an environment where people come and complain, they will at least get some time to act. Hope companies start looking from this angle now on.

The attrition problem is not only about candidates and companies, but it is also due to increased economic activity in the country. The economy of the country is growing fast, and salary and opportunities are increasing faster.

There is one more factor, which is intensifying the problem, the mentality change in the people. Now everyone is thinking about changing his company as soon as possible for better compensation. If someone stays long in a company others see him as not competent enough to find a new job, which is unlike the scenario 5 years back. Then, people actually use to respect the seniors who are on board for long time.

Most people believe few moves are necessary to maintain a good career growth. We can actually find such people who grow quickly with frequent moves in the early stages of his career. They actually do. But I don't agree if someone says it is the sole reason. Those people might be selected few extra-talent people, who happened to follow that path. There are ample examples in the industry who have good career growth without changing companies. The main point is not changing company but being hardworking, being proactive and working with full dedication.

My guru use to say, intelligence is not equal to success but intelligence plus application is. Also, those people grow, who can dare to think big. Therefore there are two main mantras for growth:
1. Think big and chase your dream.
2. Be proactive, hardworking and apply your intelligence.

Let us analyze something from the companies prospective also. Many companies seem to be fine with the attrition. They just want to hire people for a one year program and if someone stays further that will be a bonus to the company. The facilities and the basic pay is very low in comparison to the other companies (with no bond system) for the bond period. They invest in people for few months in training and then make them work for other few months till the candidates are within the bonded term. Then the candidates leave and companies start fresher search again. The problem with this system is employee never love the company. He will not be working up to his potential but rather working because he will have to complete the bond term. This mentality harms both the company and the candidates.

If your company does not believe you, it is not the right place to work however good may be the prospects later. So I would say, avoid bond in all cases. Join somewhere where you will feel like working, working not for you manager or your company but for yourself. And that feel of working for self comes where there is no bond. It is like loving a girlfriend before engagement. In this condition, working can be fun. And if you enjoy your job, you will have to succeed. If your company does not give you what you deserve, then its competitor will. So just chill.

Please do not forget to give your views or comments. I welcome any form of comments on the post.


Lokesh Awashy said...

As far as complaining after joining is concerned....u r absolutely correct.

One should look beyond package at times, everyone wants to earn more but it is not the only factor affecting ones performance. Doing what u believe has always improved innovation and productivity than any other factor.

That is why I would say that emotional quotient of any employee is a very vital issue, which needs some extra care. Its pretty much like the disparity created by reservation in education...same pay for same job would motivate everyone to perform his or her best.

Anonymous said...

Very insightful article Bhupe dai
It gives a good perspective to many freshers like us on the verge of getting into the corporate arena. It raises many pertinent points.
1) Does a candidate's brand value (IIT/non-IIT) suppress his skill set?
2) Does a company's monetary package suppress their suitability for a candidate?

Manish said...

Very nice article Bhupendra...

Good work.

Le_Plan said...

Thanks Lokesh, Cahndu and Manish.

Chandu, you have raised genuine issues. Hope HR people take in regard these things. I call for a performance metric that is fair enough to remove all biases and that addresses the emotional issues of the employees in the right way.


suv said...

Thnkx bhupen daii, we woulld like 2 have more margdarshan frm u

sameer said...

Nice thoughts really informative :)


Bhupendra, those students were admitted as Buisness analysts... Buisness analysis has got nothing to do with Technology and is related to Management and Finance. If those IIT Students had a better understanding of Finance, how could you expect NIT graduates to get the same salary?
And the NIT guys were in as Assistants to IIT guys... naturally there was bound to be a pay difference


Please clarify me if I am mistaken :)

Le_Plan said...

Thanks Suv, Sameer and Maulik.

Maulik, even though I don't agree with you that IITians have better understanding of Finance, I don't straight away deny value of IIT brand. What I see here is some serious flaw in the company doing so for which they had to face very serious problem.

I am a strong believer of market demand and market price. So, paying lower salary to the NITians made every sense as those guys joined. But the long term was hit hard. I would say it a good sales and poor brand management. Sometimes its good but if not properly cared, companies die of it.

Maulik, one thing that surprised me is your belief that IITians superiority over NITians is in Management and not in Technology. I have no comments on this.

Afterall company need to judge people on the basis of performance and not degree. And I hold strong on it. If the company had taken effective measure to balance the salary and position offered w.r.t. the performance in company in 3 to 6 months, then the start would have been better justified.

I am sure I could not answer you well. But I hope, I was able to clearify my stand better.

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