PwC Australia recently revealed the salaries of all of its eighty thousand employees. Its report included pay brackets for Senior associates ($141,500-150,000 a year), Managers ($180,000-197,500 a year), and Senior managers ($235,100- $270,781 a year).
PwC’s goal is to remain transparent about how the employee pay is determined. The company’s decision to release the wages of its employees is a rare instance in corporate world, where employees’ salary is seldom disclosed.
While discussing salaries during interviews, employees usually offer their experience and unique skills hoping to negotiate a good package deal. Regardless of whether they succeed in getting what they desire, this practice is very much prevalent in the world of business because there is no fixed pay for certain jobs. Even though organisations usually put a limit to the sum they can offer the employees, they are sometimes willing to make concessions and work out better deals.
There is nothing inherently wrong with such a practice, but it can be a disorganised approach that can reveal the instability within an organisation and its distribution of money.
Will it be better if corporations in India can create a system wherein all employees receive salaries according to their job roles, and not based on how well they can negotiate their pay during interviews?
“If the employees’ contribution is based on the output which is easily quantifiable, then they will get the salary that’s stated with the job description. However, if the job demands information and insights to create superior value, then things are different”
Emmanuel David, HR leader
Jayesh Sampat, former head-HR, Liberty General Insurance, says, “The pay range of any position depends primarily on the dynamics between demand and supply of such candidates, market pay range and internal pay parities. And the pay the candidate finally ends up getting within this range, depends on the negotiating dynamics between the recruiter and the candidate. This is by and large the ‘unfortunate’ truth for many organisations.”
Having spent some time in an organisation, and having performed well, employees reach a position where they can renegotiate their pay and get a raise. They can seek a better increment if they believe they are being underpaid or not as well as their colleagues, Sampat explains.
All of these dynamics erode trust, developing a ‘transactional’ relationship between the employees and the organisation, points out Sampat.
“However, in my career, I have also come across organisations that believe in ‘one job, one pay’ and live the value of fairness while they are recruiting. Usually, such organisations are valued by their workforce, and their employees go beyond their call of duty to deliver for them. Here, fairness is not just limited to pay. The relationship between the employees and their organisation goes beyond being merely transactional,” Sampat asserts.
“The issue of transparency and ‘one job, one pay’ is not only restricted to the recruiting process, but is really an outcome of the larger organisational culture and values,” Sampat concludes.
“The previous salary becomes an indication of the point at which the person used to be, and the kind of money that can be made in the future”
Abhijit Bhaduri, executive coach and author
Emmanuel David, HR leader, believes, “The pay of an employee depends on the sector”.
“If the employees’ contribution is based on the output which is easily quantifiable, then they will get the salary that’s stated with the job description. However, if the job demands information and insights to create superior value, then things are different. Such employees can usually negotiate better pay for themselves upfront,” David says.
When one finds engaged people, one ends up compensating them for the initiative they take, David justifies.
“Even if the starting line is the same, there are people who perform better than others at a job. The ‘also ran’s don’t get the ‘prize’. If people fail to get a prize here, they will go somewhere else and run another race.”
Simply stated, people who are better at a job than others are likely to get better pay as well because their performance yields better results for the organisation.
Abhijit Bhaduri, executive coach and author, admits, “Skill levels vary, and therefore, salaries will vary”. According to him, pay is an outcome of demand and supply.
“However, in my career, I have also come across organisations that believe in ‘one job, one pay’ and live the value of fairness while they are recruiting. Usually, such organisations are valued by their workforce, and their employees go beyond their call of duty to deliver for them”
Jayesh Sampat, former head-HR, Liberty General Insurance
If the skill is in demand, and the supply is low, then the person obviously gets more money. “The previous salary becomes an indication of the point at which the person used to be, and the kind of money that can be made in the future.”
The way in which a person’s salary is decided is unique to an individual and his/her skills. It will be difficult to fit everyone in the same kind of plans for the same jobs, says Bhaduri.
Praveer Priyadarshi, senior HR leader, says, “Any kind of job has a salary range, which means that it will have a limit of maximum and minimum pay a person can get in that role.”
“A lot depends on the person’s experience according to which she/he slides down or up the range of the salary scale,”Priyadarshi adds.
It is evident that organisations value employees’ experience and are likely to make adjustments in their salary plans if they find them to be experts in their field and capable of guaranteeing good results.
“A lot depends on the person’s experience according to which she/he slides down or up the range of the salary scale”
Praveer Priyadarshi, senior HR leader
It isn’t easy to overhaul a system overnight. And not only India, but corporations worldwide tend to have loose reins when it comes to discussing salaries, because there is always a chance of employees demanding more because of their unique skills and experience.
It will be very difficult to eliminate or improve this practice unless a better model is introduced that is mutually beneficial to the organisation and the employee.