Cover thy neighbour's pay

So let’s say you’re holding the lofty title of deputy senior associate manager and she’s a deputy senior associate manager. She’s in her early 30s. You’re in your early 30s. You oversee four people. She oversees four people. She went to one campus of the Indian Institutes of Management. You went to another.
Should the salaries be the same or different?
In these times of attrition, salary hikes and fast promotions, the answer is not so clear. Chances are, the last person to be hired is making quite a bit more; such is the nature and reality of pay increases in a candidates’ market.
While compensation has completely changed, one thing sadly hasn’t: People at work still talk about how much they make. So, salary looms like the big elephant in the office that everyone knows about and discusses secretly among themselves. Not exactly conducive to creating a harmonious work environment.
Workers themselves are torn on just what is fair. Consider one graphic designer in Mumbai who recently came to discover that someone with his same title—but many years senior —earns about the same.
“He is about twice more experienced than me in terms of the number of years he’s put in,” he said. “I have come to know that his salary and mine are not very different.”
Was he proud of being at the top of his industry’s game? Not really, he said, sounding rather depressed. He felt like he didn’t have a whole lot to look forward to if he stayed on in the company.
“Large companies do underpay people, which is not fair,” he said. “That’s the reason people never wait for increments and prefer to move on for better ‘jumps’.”
Indeed, even as I think young workers are doing themselves the greatest of career disservices as they jump from job to job, a look at the disparities in salary yields the fact that they often have little choice. In some ways, that’s also why the culture of discussing numbers—in addition to the one upmanship rampant in corporate India—persists.
Is equal compensation for equal work possible? No, because there’s no such thing as equal work.
In the words of one manager, “Communism and socialist view on salary does not work in India. Even employees…will want their ‘fair’ share more than others in their peer group.”
Salary is a complicated formula, or perhaps not a formula at all. Managers varied when I asked how they arrived at salaries, but cited one common parameter—what someone was earning before. And even as the guy with the most tenure at a company becomes team leader first, he’s often viewed with a certain scepticism, as though he remains because no other options exist.
“Whenever you have to go out and hire individuals, you end up providing a 30-40% increase to make the move competitive. Many individuals, irrespective of proficiency, end up landing at the higher end of the compensation band,” said Sandeep Chaudhary, a business consulting leader at Hewitt in Mumbai.
His solution is actually not to throw money at good people but reward them with perks and responsibility. “What organizations don’t do a great job of is communicating rewards. It is the least understood topic by business managers today,” he said.
The worst offenders, the managers I spoke to largely agreed, are human resources managers who gossip about the different compensation bands among employees. To combat this, employers should drive home the negative impact this can have on a workplace, even as they assure employees transparency in the areas it can be offered—opportunities, training, job postings and other incentives.
“People do compare and share notes on their packages. I am sickened by it as an employer, but employees relish in it. Smart ones know it hurts them more in the long run. Show-offs don’t last long,” said Prashanth V. Boccasam, the head of Pune-based Approva Corp., a firm that makes auditing software.
The truth is that no two workers are created the same—whether they make widgets or make software. As India becomes a major player in the global economy, two things must happen to ensure our treatment of our own workers is just. First, they need to be paid fairly to begin with. That means looking at the company’s bottom line and ensuring there’s some justifiable division of wealth, and that per employee spending remains higher than peer firms—and salary represents one part of that spending. More importantly, workers need to be given an incentive to stay beyond money, even as they understand why they earn what they do. Underperformers are not underpaid.
Offer fair salaries, responsibility and opportunities to shine—and the work ethic should rise proportionately. The stellar output alone should silence those who complain.