Dinesh Divekar
Business Mentor, Consultant And Trainer
Umakanthan53
Labour Law & Hr Consultant
Eira Knowledge Matters
Disc Assessor & Trainer, Soft Skills,
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Ankita1001
Sr. Hr Executive @ Polymerupdate
Garimachaturvedi
Asst. Manager Hr
+1 Other

Hello Everybody,

Would like your expert advice and guidance in an Employee Increment related matter in my company. We have certain people in some departments who have been in the company for a long time 5+yrs, 10+yrs etc and they are at the same level at which they joined the company. Some of them are workers like Warehouse Helpers, Production Coordinators and some of them are staff like Accounts Executive, Graphic Designers, etc. Every year we give them an increment on their salaries within the range of 10-15%. Since they have been in the company for long, their salaries especially of the workers has increased quite a bit. Due to high experience in our company they know all the technicalities involved and posses good functional industrial knowledge.

For example we have an unskilled Warehouse helper who joined at a Salary of 3k drawing a current Salary of 15k, whereas in the market if he seeks another job he will get half of this.

But my question here is that can we fix a limit till which their salaries can be increased and how? Similarly for staff category incase a person is not growing vertically cant assume more responsibilities or get promoted but is doing the job of execution well is an increment justified for him/her? And can we put a cap on the maximum salary for a level beyond which increments can be stopped?

Awaiting for your valuable comments.

Regards,

Garima

Mumbai
2nd April 2013 From India, Pune
Wow.. No replies??? Its Increment time Seniors,, would appreciate your comments and guidance to take a correct decision..
4th April 2013 From India, Pune
Dear Garima,

Your company's is a classic case where it shows what happens when HR fails to plan career of the employees.

Instead of putting a cap on their increment, create a promotion avenue for them. Your company has not grown them, is it their fault?

Now for this year give them increment as usual. However, sit down with each long serving employee. Chalk out strength and weakness of each one and find out where he/she can be placed at higher level. Send them for the training courses.

"Career Planning" was part good old personnel management. Now today the trouble with the modern HR is that they do not like to be called as Personnel Managers but neither they become fully HR Managers. Situations of this kind arise because of half baked HRs.

Now you will face one more challenge. They have become experts in their existing job because they have been doing it for the years together. Whereas they were getting their increments too. Now they could be change resistant. Changing their attitude would be quite difficult. If someone does not wish to grow then you need to take tough action that person. For such persons nothing wrong if you stop the increment. Now itself tell them that if they refuse to grow in the company then in the next year they will not be given any salary increment.

In one very famous transport company I heard that they do not keep an employee in the same designation for more than five years. Either the employee is promoted or if found unfit to hold the higher post then he/she is told to put in papers.

Earlier there was query on promoting the office boy to higher level. I had given my comments for that post. Click the following link to go the reply. Especially please check the last paragraph.

#post1840325

Ok...

Dinesh V Divekar


4th April 2013 From India, Bangalore
Dear Garima,

It is a piquant situation that the HR manager who is very keen in granting some hike in the salary of certain lower rung people positively because of their long and sincere services is a little bit reluctant either because of their personal incompetency to move up vertically or job-wise they are simply stuck in the rut.In manufacturing industries like textiles where hike in wages of workmen are generally related to the hike in their collective productivity, just a distinction is made between seniors and juniors by introducing the component of service-weightage. Particularly certain jobs by nature permit no possibility for either career development or personality development to the incumbents. Never the less, those jobs as well as the incumbents are indispensable.So, motivate them by granting periodical increments without putting a cap so that they maintain their efficiency in their jobs and loyalty to the organization.If you are very much obsessed with cost-consciousness wait till their normal retirement and then out-source the jobs, if desirable!
4th April 2013 From India, Salem
Thank you Mr. Divekar for your response. HR has been recent in my company just around 3 -4 yrs old. Prior to that for the past 25 years we have been working traditionally. But now the company is growing and expanding.
Career planning is a good option but the ones I am talking about are unable to move up the ladder we have tried it a few times. They lack the ability and attitude to move on to the next level. As you rightly said few of them have become change resistant, and also due to their long years of association with the company and personal relations with the management they think they are indispensable. So now we also have started getting attitude issues from their end. They dont want to adhere to process or policies set. We dont wish to terminate them due to the loyalty they have shown over the years. Cost too is not the main problem, but the problem we face is of salary imbalances amongst that dept due to the old and new staff.
Garima

5th April 2013 From India, Pune
Hi Garima,
In addition to what Mr Dinesh has suggested, and given the fact that resistance to change by these employees is visible, I think you can also try the following:
1. Set a salary cap for each of dead-end jobs / roles levels effective the next performance review cycle
2. Do away with annual increments
3. Bring in a differential incentive package based on achieving specific performance criteria
If you have buy-in from the leadership, you could develop a suitable careerpath for each of such roles, this will provide opportunity for growth and lateral movement (assessment development center could be helpful).
Thank you.
Shashidhar
5th April 2013 From India, Hyderabad
Hello Garima

our subsequent information is that they are reluctant to grow vertically despite the opportunities provided to them. It is true that granting increments merely on the basis of length of servcie may result in situations where a ware house helper with 25 years of servcie but without any specThe best solution to deal with this uneasy problem is what Mr.Dinesh has suggested.However what I observe from yk of accountabilty and responsibility, may be earning Rs. 40000/- per month, not to speak of the protection under labour laws whereas a Ware House Manager with 8 yeras of servcie may be drawing Rs.25000/- per month but shouldering huge responsibilties for pilferage or wastes or damage and risking his job for such lapses and that too without any law providing any cover to him.This anamolous situation may be demotivating to the employees in mangerial cadre.Therefore I have the follwing suggestions to deal with the issue.

1)Whenever garnting increments are linked to the length of servcie, it is advisable to fix a stagnation stage at some point of time in servcie beyond which an employee does not earn any increment.To justify such stagnation stage and in order to make employees not to feel that the mangement is practicing unfair labour restraints, the employee concerned shall be offered an opprtinity to sit for a promotion test to elavate himself to the enxt higher postion and to shoulsder higher responsibilty so that they need not stagnate but earn increments agian in such higer postion.

2)The message that goes through such process is that if an employee does not sit for a promoton exercise to be conducted by the mangement, then he will be considered to opt for stagnation in his current psost and pay, of his own volition.This may encourage or even force many lower cadre employees to pt for higher responsibilties.

3) Mostly an employee spending 15 years of servcie in a company may also be acquiring skills in functional areas other than their own . For example an accounts executive might have acquired skills in an administrative job or Graphic designer might have acquired skills in other areas of software applications.These skills are called transferable skills. Explore the posibilities whether these transferable skills can be utilised in other departments so that they do not stagnate.

B.Saikumar

HR & Labour Law advsior

Mumbai
8th April 2013 From India, Mumbai
Hi Garima,

After the experts' suggestions, I have very little to contribute.

My suggestion is as follows-

1. Change is always resisted because when system change, we fear loss. If one fine day I come to you and tell you - Garima, tomorrow onwards we are having so and so changes in the rules, you too would resist it and think that I am being unfair. So the best option for now is if your appraisal period is near, continue the age old process for current year as it wont be fruitful bringing in change in such short duration.

2. Try to educate and communicate to your staff (both blue collared as well as white collared) that you are bringing in policy which would really help them grow and for that you need their suggestion.

It is my view that when you ask your people their opinion and suggestion to tackle a problem, they feel privileged and important.

Apart, it becomes positively communicated that you are in the process of bringing in change.

Tell them that the company wants to be fair in doing the appraisal process rather than just giving same or similar hike to all. If you are performing better than someone else, you fall in better performance level than others, you should be recognised in exceptional way.

Ask them how can their performance be tracked. Perhaps, you may get a couple of ideas for your implementation. And if nothing else, as I said earlier you are making it clear that things and processes are on their verge of change.

3. Try to find out in other firms in same industry how do they track performance and carry out appraisal process. It would again give you an idea regarding what is to be done. Take all ideas, note them down and try to figure out which one will work the best for you.

I hope this should help. :-)
8th April 2013 From India, Mumbai
Hello Garima

The first Para of my above post got jumbled while pasting. I am reproducing it below for proper understanding of the content.

"The Best solution to this uneasy problem is the one suggested by Mr.Dinesh. However I observed from your subsequent information is that they are reluctant to grow vertically despite the opportunities provided to them. It is true that granting increments merely on the basis of length of servcie may result in situations where a ware house helper with 25 years of servcie but without any speck of accountabilty and responsibility, may be earning Rs. 40000/- per month, not to speak of the protection under labour laws whereas a Ware House Manager with 8years of servcie may be drawing Rs.25000/- per month but shouldering huge responsibilties for pilferage or wastes or damage and risking his job for such lapses and that too without any law providing any cover to him.This anamolous situation may be demotivating to the employees in mangerial cadre.Therefore I have the follwing suggestions to deal with the issue."

B.Saikumar
8th April 2013 From India, Mumbai
I am sorry to say; but I have a different opinion.

I think, management is responsible for the present mess : "HR has been recent in my company just around 3 -4 yrs old. Prior to that for the past 25 years we have been working traditionally."

Now thee company is looking for a quick-fix solution - "But now the company is growing and expanding."

As they say; "Rome was not built in a day"; It is not possible to change the situation overnight, however hard one may try - "Wow.. No replies??? Its Increment time Seniors,, would appreciate your comments and guidance to take a correct decision.. "

Under the circumstances; it is best to adhere to the suggestion given by Mr. Dinesh Divekar, as paraphrased below :
" Now for this year give them increment as usual. However, sit down with each long serving employee. Chalk out strength and weakness of each one and find out where he/she can be placed at higher level. Send them for the training courses.

"Career Planning" was part good old personnel management. Now today the trouble with the modern HR is that they do not like to be called as Personnel Managers but neither they become fully HR Managers. Situations of this kind arise because of half baked HRs.

Now you will face one more challenge. They have become experts in their existing job because they have been doing it for the years together. Whereas they were getting their increments too. Now they could be change resistant. Changing their attitude would be quite difficult. If someone does not wish to grow then you need to take tough action that person. For such persons nothing wrong if you stop the increment. Now itself tell them that if they refuse to grow in the company then in the next year they will not be given any salary increment."

For the future; the advice of Mr. B. SaiKumar holds good.

At the same time; I think the Company and HR too, should shed their negative attitude; and treat the employees with a long tenure; with more respect. People talk very highly of Loyalty; but fail to respect it when they see it before them.

the attitude problem seems to be more from the management side : "So now we also have started getting attitude issues from their end. They dont want to adhere to process or policies set. We dont wish to terminate them... "

Also, instead of having a condescending attitude, fake patronizing outlook, about the employees who have become highly skilled in the their jobs over the years; one should at least be aware of the job market trends; or at least the Minimum Wages for a Highly Skilled Warehouse operator/Supervisor .

Just keeping them stagnating as Warehouse Helper - although admitting that they know all the technicalities involved and possess good functional industrial knowledge- over so many years and not admitting to their skills or changing their designations and giving them suitable promotions; all these speak about the mindset of the Management in general and HR in particular - which is amply illustrated in the following sentences :

"Due to high experience in our company they know all the technicalities involved and posses good functional industrial knowledge.

For example we have an unskilled Warehouse helper who joined at a Salary of 3k drawing a current Salary of 15k, whereas in the market if he seeks another job he will get half of this. "


On one hand the person is called Unskilled Warehouse Helper' while on the other hand admitting his skills and knowledge; and also how his salary has grown. Also one would do well to consult the Minimum Wages of the state to understand that the salary of such a person would be more than 7.5 K as erroneously thought by the management and HR alike.

Hope the realities do not sound too harsh; even if they do, but its best to accept the harsh realities; and do some soul-searching to understand if the problem is not self-created.

The solutions have already been offered by our in-house HR experts !!

Warm regards.
8th April 2013 From India, Delhi
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