Compensation adjustment for Long Tenure Employees - CiteHR
KK!HR
Management Consultancy
Imtiyaj Ahmed
Assistant Manager - Hr

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Hello
Good Morning!
I am working for a Large Group of company which has 30 different types of Business. Salary and benefit packages are market standard considering business types. I have to pay 20-30% higher salary when i am recruiting new employees from market.
The main challenge is i also need some alternative solution for existing employees who are getting slower growth due to long time continuation with company & under annual increment policy. Eventually they are becoming demotivated. Expecting some ideas!
Thanks in advance!
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In this type of situation, one step could be revision of scales if it is due and could be considered. It is stated that the salary levels are market standard and so there may not be much scope. But any increase in salary is only extra burden on long term basis and its motivational effect is little and is without enduring gains.
As one solution I would recommend is to initiate an incentive plan so that the employees are rewarded handsomely out of the extra earning from current level. As to the senior employees, you can build in a factor which would be more generous to the more experienced than the fresh ones recruited. As the incentive is linked to productivity & efficiency, the company is getting extra returns and there will be no extra burden on it. As to the senior employees, you can build in a factor which would be more generous to the more experienced than the fresh ones recruited. I know a practical situation where the efficiency increased by approx. 25% when the incentive scheme was revised to match the employee expectations.
Thanks a lot for your valuable opinion.
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