Should work-from-home invite salary adjustments?

Work-from-home’ wasn’t a common practice before the pandemic-induced global shutdown. However, due to the unprecedented times and the desperate measures that had to be taken, most companies have now shifted to remote operation for roles where output is not affected. Now that vaccination drives have picked up steam in India, many corporates are looking forward to opening their offices to their employees and moving towards establishing a sense of pre-pandemic normalcy.

However, over the course of the past year, many professionals have mastered the skill of executing their tasks effectively from a remote location. In fact, now, in a bid to get employees to return to working from office, smaller organisations are implementing a new practice. They are revising their pay structures — paying a deducted compensation to those operating from home in comparison to those working from office.

“Reward is always linked with the value brought to the table. If one delivers, one must be rewarded adequately, irrespective of the workspace. Hence, in my opinion, it is not a good idea to link the reward to the workspace”

Paramjit Singh Nayyar, CHRO, Bharti AXA General Insurance

However, Paramjit Singh Nayyar, CHRO, Bharti AXA General Insurance, believes that such a policy shift is not a good idea. “Reward is always linked with the value brought to the table. If one delivers, one must be rewarded adequately, irrespective of the workspace. Hence, in my opinion, it is not a good idea to link the reward to the workspace. Rather, it should be linked to the performance,” he says. Nayyar believes that the introduction of the policy was a testament to corporate empathy. Hence, giving it a monetary angle would be unwise. “Work from home is a true representation of empathy, respect for each other’s privacy, as well as health and wellness. It can never be equated with monetary benefit. This is a gesture or model that organisations are adopting to make sure that health and wellness of their people are prioritised. Hence, it may not be a good idea to differentiate rewards on the basis of the workplace that they operate in,” explains Nayyar.

The reasoning behind offering different compensations is that those working from office will be bearing additional costs for commute, and so on. However, Amit Sharma, head HR- revenue, Zee Entertainment, believes that such discussions are irrelevant as such costs are also incurred while working from home, as employees work with their own bandwidth and electricity. Sometimes, employees also use their personal systems or gadgets to deliver. Hence, a discussion about varied compensation is less legitimate if one looks at it from a wider perspective. He believes such a model is not called for.

“Compensation based on working from home or working from office is not a sustainable model. One is still in the same labour market and the organisation is susceptible to getting its talent poached by competitors offering higher pay”

Amit Sharma, head HR- revenue, Zee Entertainment

Sharma further adds that lowering salary on the basis of workspace can backfire on the employer. The compensation for a role is driven by the market positioning of the role. One has to typically refer to the talent market and decide whether one would want to put a premium on it or not. In Sharma’s opinion, “Compensation based on working from home or working from office is not a sustainable model. This is primarily because the cost of living for the person would still be the same, irrespective of the workspace. Further, one is still in the same labour market and the organisation is susceptible to getting its talent poached by competitors offering higher pay. Hence, such a strategy can backfire,” he says.

Kamlesh Dangi, group head, human resources, InCred Financial Services, however, has a different point of view. He believes different pay structures may become a reality in the future. “Though I haven’t seen such policies being implemented in mid- or larger-scale organisations yet, they may become common in the future. People are already reluctant to return to office, fearing a third wave, and because many are still unsure about getting vaccinated. Hence, it may be unfair to expect people to leave the comfort and safety of their homes to come to office. Larger organisations can definitely look at revising contracts for people working from remote locations,” he says.

“Larger organisations can definitely look at revising contracts for people working from remote locations”

Kamlesh Dangi, group head – HR, InCred Financial Services

Companies are yet to take a decision on compensation revision, given the uncertainty around the third wave. If the lockdown is reintroduced, everyone would be required to set up their office spaces at home, yet again. Hence, a decision on this remains pending with most employers. “With the uncertainty around the third wave, no call on this has been taken by mid-level or large-scale organisations. In larger companies, frequent policy changes are not appreciated,” points out Dangi.