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How much is REALLY ENOUGH – Part 2

By | Ramesh Ranjan | Editor www.humanengineers.com

I feel privileged and would like to Thank all for the overwhelming response to my article Executive Compensation – How much is enough ? published in Linked In last month.  14300 views, 1250+ likes and 89 comments from people from around the world – India, USA, Canada, UK, Europe, Russia, China, Malaysia, Vietnam, Phillipines, UAE, Pakistan, Singapore, Dubai etc., different walks of life/profession and all levels in the hierarchy.

Surely it has touched the hearts of people and surely is a burning topic for discussion.

It would be difficult to acknowledge and respond to each and every one who have commented and hence my acknowledgement, response and comments are summarized as follows :

I too strongly believe that Compensation or better still Rewards is to be Market driven. However it would be prudent to ensure that we balance the Market and Internal parity. Many still consider that Compensation & Benefits is the key for Attraction & Retention of Talents (as many have commented to my article), but there is enough Research & evidence that it is not the only or the Key Driver. Look at the Public Sector Organisations like ISRO, DRDO, BHEL, HAL, RBI etc and you will find that despite being paid significantly less than that of the Private Sector, they are able to attract, retain and produce extraordinary results. Please refer to my earlier article in Linked In Ordinary People producing extra-ordinary results.

I am for one not suggesting that Top Executives shouldn’t be paid top draw million dollar salaries. However I am proposing that there has to be a need for internal parity so as to ensure that every one in the organisation leads a decent standard of living.

Pay for performance should be the strongest driver for Rewards especially hikes. In the examples quoted and as Narayan Murthy pointed out in Infosys case, the Hikes have not been commensurate to the Performance and hence the outburst and angst for the hefty pay hike (fixed plus variable pay).

The angst is even more when Top Management adopts double standards when it comes to Compensation philosophy. One set of liberal yardstick to the Top Management and a very stringent and stingy yardstick for the rest of the employees is what disturbs all of us. In the Infosys case the company is quoted to have cash reserves of 5.25 bn Dollars. Still it is proposing 8-9% Salary increase to the employees but very liberal when it comes to rewarding their CEO and COO. The same in the examples quoted in my own experience, the Country Head could revel in luxury when the company is making losses and would quote the same losses when it comes to Plant workers salary increases.

I am not suggesting that Government should intervene and cap salaries in Private Sector as was done in the past. I agree that it will be a regressive step towards Economic Reforms. However I suggest that there should be introspection and self-control / governance on part of Organisations especially the Board rather than being forced by any external forces.

The dual standards adopted by Organisations will likely erode the trust and faith of the employees in the Leadership and the Management Team. The credibility of the Top Management and the HR Department is at stake and truly tests the Leadership, values and governance standards of the organisation. It exposes the sheer hypocrisy of the Leadership and the bankruptcy of values & ethics of the Leadership and the Management Team. It’s here that the HR Leaders have to stand up and make themselves count and ensure equity, fairness and balance in the Rewards system. No wonder Loyalty is a dying value in many organisations and Retention the biggest headache for the CEO and the HR Leader.

I once again reiterate that there should be an open debate about transparency in Compensation. It’s about time that it makes Good Corporate Governance to publish all Top Executive Compensation to public and more so within the organisation even if not mandated by Law. An Open Compensation policy will perforce drive parity and sanity in Compensation & Rewards. Top Executives will be hard-pressed to justify their salaries. As long as it’s kept hidden, secret and is enshrined in a Black Box, the potential to exploit it to their own end and benefit will continue. It’s about time this is put to an end. Please refer to my earlier article in LinkedIN – Why not an Open Salary Policy -for promoting Free Market Place ?

Its not a case of SOCIALISM vs CAPITALISM. If there is no self awakening and self regulation, capitalism may come to an end in the not-so-distant future, if the current corporate leaders do not heed this advice in India, as has been warned by Narayan Murthy.

What is ENOUGH & How much is REALLY ENOUGH

There were many who said that the Top Executives need such compensation to meet their future requirements and post-retirement life. Many said that “How much is enough” is relative. How much is ENOUGH is often led by the NEED of an individual. However I believe that we should not let the NEED become GREED. It is sometimes argued that the basis of greed is need. I feel that it’s not a real need, but a felt need. There is a thin line between GREED and NEED. How do we define it though? How do you know that you have ENOUGH? Only when you can know your “ENOUGH” then you are on the right track. Its important to know your ENOUGH. If you don’t know your ENOUGH, you will always want to fill that void, and its one of the hardest things to do, no matter who you are and how rich you are.

Cine Superstar Rajanikant has said “There is nothing wrong in dreaming a luxurious life. What needs to be taken care of, is to not let the NEED become the GREED. Because needs can always be be met..but greed can never be fulfilled”.

It’s time that the Management of Organisations understand that there is a need in each and every one of the employee who is working hard to make the Organisation succeed. There is a need to better the standard of living of those at the Bottom of the Pyramid even more than those at the Top with ever rising inflation in this country.

Hope organisations take a cue from our Father of the Nation, Mahatma Gandhi, as he rightly said “there is enough to meet the needs but not the greedy”.

As far as for the Individuals occupying the TOP Management positions, wish one could take a cue from our Cricketing Super Star, Ravichandran Ashwin. When asked to comment on whether the current crop of Cricketers in India, are being paid peanuts compared to the earnings and profits of BCCI, he said “ Is it enough? Well, my family gets enough to live, so I am happy.”

How many of us believe and will behave like Ashwin – well I guess it all boils down to one’s individual values……..

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