Ukmitra
Business Development, Employee Relations,
Abedeen7
Assistant Manager Human Resources
Nashbramhall
Learning & Teaching Fellow (retired)
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Saumya.agarwal2
Senior Manager Human Resources
+1 Other

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Hi ,
I'm employed with a furniture and fixture manufacturing Company in XYZ. These days we have lots of projects which needs to be completed on time.Employees are aware that if they leave at this time, Management will do anything to retain them. Employees are resigning and blackmailing the management that if a decent salary hike is given to them, then only they will take back their resignation. This has become the practice of the day. Please advise how to stop this practice.
Warm regards
Saumya
[Name of the place edited to ensure privacy ]

Dear Saumya,
Pure economics: theory of supply and demand works here. If the company has no pool of workers to recruit from, they have no choice but to give in or lose business. Please give more information about the size of the firm, what pay is like compared to other similar organisations,for how long has the firm been in business, etc. More the information that you can provide, more precise will be the advice that you get.

Hi, We have 500 employees. Our Organisation is know for having latest machines and using latest technologies. People from our Company are picked up by competitors and they are offered double salary.
You have answered your question. If competitors are offering double the salary that you pay, would you not be tempted to leave? Any organisation has to pay its workers in line with what others pay or they will have attrition. May be introducing a loyalty bonus may stem the rot for a while.
Generally speaking; after the liberalization in India which coincided with the waning of Labour and Trade Union movement; it has been the employees in general who were at the receiving end.

Summary termination without even notice or notice pay; Bifurcation of Minimum Wages; Denial of Maternity Leave; Denial of gratuity etc etc are just some of the excesses committed by small companies. Such caases are being documented from time to time in CiteHR for all to see.

People talk about "Laisseze Faire" or Free Market economy as the reason for such situation.

It also means that allowing the Law of Demand and Supply to act.

Under these circumstances; employers have always had the upper hand as there were more people chasing less jobs.

Now, the situation seems to be reversed in case of your company. whatever be the reasons; employees have got a chance to dictate terms.

In my opinion; this is a good situation. It will force employers to treat employees a bit better than they have been doing so till now. May be some companies will start seriously thinking about Retention Strategies and Employee Motivation - which so far are encountered only in classrooms by MBA HR students.

Warm regards.

Hello Saumya,
I believe you are discussing regarding workmen category. This is the time most of the employee start looking for new opportunities; to retain them we need to provide them with competitive pay and better working environment.
Today’s in this competitive world employees drive the organization not the machines. I would advice to prepare a legally validated employment contract with 2 month notice period. The wise thing is always have back of plans to deal with emergency situation (additional employees’ arrangement).
I believe this will be the learning instances for you; I would advice straight talk with the management about the issues and be ready with the probable solutions. If you provide better pay, benefits, development plans and working environment employee will be happy to work with you.
Hope this may help you in finding a solution to this situation.

Hi Saumya
This happens in many places. To avoid such problem keep on taking trainees at a low cost with a training period of six months / one year so that once the other employee threaten to resign the best trainee will take over. This will make other experienced employee to think about before asking for a threatening pay hike. One important thing is supervisors are not thorough with the work. They depend upon their subordinates for any work and this is the main problem persists for the employees to threaten to go for resignation to ask for a pay hike. The management should never lose their balance over this type of threatening pay hike. However sincere and loyal employees should always be rewarded.

Hi Saumya,

You have a good opportunity to restructure your Salary grade with this challenge. Don't look this act of employees as "Black Mail". This is but words from owners and stakeholder. You are HR, think differently and react differently.

Immediately have a SWOT Analysis done for your existing workforce in coordination with your management. Let them know if they don't they are big loser going ahead and also you as HR will have extra efforts in getting the work force.

"Job evaluation" is the best way out. It will help you do comparison between jobs to assess their relative worth for the purpose of establishing a rational pay structure.

Just because the competitor are paying double salary, don't just go and do that. Have a long term plan made for the company and rather than only salary have fringe benefits and good appraisal system and growth structure implemented in company.

A good example would be "3 Performance bonus" in a year and many others.

Wish you good luck and make the challenge in front of you an opportunity to excel yourself as a HR Pro.

Ukmitra


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