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Dear All,
I have come across a very pecular problem but common - where in to attract right talent we have to pay good salary to new recruites which needs to match with industry/market rate and inflation rate.At the same time old employees working in same dept has less salary because he has joined much before and grown with company.If we are paying good salary to new employees,but old do not get inspite of seniority and loyalty factor - how to correct such internal disparity in salary and retain both old and new employees . Please suggest.

From India, Hyderabad
If you are into recruitment business, try paying salaries with moderate and high commissions.
If you still find this is not the solution, bring in statutory components to your old employees and make the new joins as probationary period for a while later permanent with new component.
Still no solution, compare with the qualifications and job role.

From India, Delhi
Hi Falguni,

Correction of salaries of old employees is called Normalisation and it cannot be worked out without Top Management's approval...

It can be carried out in two ways mainly,

1. To compare the productivity and performance of employees doing similar work/ or are at same level and their performance is giving the same output, you need curtail the gap by normalization and put them in same grade...where salary may differ as per the band.

2. Bench marking of salary as per the market rate and figures,if the gap is too mammoth then normalization needs to be done to correct the figures for better retention of employees.

Another reason why we do Normalization is when you know a person is hired for a lesser salary, and their appraisals are due after a year.. and so the corrections are to be made...mid yearly.

Sometimes, there is a confusion whether normalization is appraisal?? the HR department has to play a key role here to make employee understand the difference between the two, as during normalization sometimes there is no hike and just categorizing employees in grade structure and salary bands.

This process sometimes takes months in large be prepared to get hold of it with apposite get desired results.

All the best..

From India, Delhi
I agree with Archna.
The sorry-state-of -affairs is prevalent in all sectors. As suggested by Archna, rationalisation has to be done at frequent intervals to bridge the gap. But unfortunately, many companies do not do rationalisation until the old employees put up their resignation papers. Then only the management realise the value of old employee and agree for some pay hike in order to retain the talent pool. only crying child gets milk and the rest are just ignored.

From India, Lucknow
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