How to Handle a New Hire's Salary Discrepancy: Disciplinary Action or Accommodation?

Dear All,

Please help me with the following situation. We have a candidate who has just joined us (3 years of experience). We offered an industry-standard hike, the candidate accepted the offer (returned a signed copy of the same). Upon joining, the candidate mentioned not knowing the exact figure in terms of the previous salary and presented a copy of the appointment letter showing a 40% increase compared to what was declared. Additionally, the person provided incorrect information regarding CTC in the application form.

We advised the candidate to provide proof of salary, such as a bank statement or payslip. However, the candidate only provided a copy of the cheque issued to her, which does not reflect the inflated salary amount.

Kindly advise on the following actions:
1) Should we take disciplinary action?
2) Since the person has already left the job and joined us on short notice, should we accommodate her?
3) If we should accommodate, what about the salary?

Regards,
Rekha

Hi!

Before issuing the offer letter, you should have asked for proof of salary and other remaining details, and cross-checked. This is typically standard practice. However, since you have already given him the offer letter and he has joined, I don't think anything can be reversed at this point.

What do the rest of the HR professionals say?

Regards,
Sweta

Dear Rekhaaaa,

Let me try to reframe what you are asking:

The person has stated her salary below what is given in the appointment letter. If this is the case and she has accepted the CTC you are offering her, there is no problem in the sense that the hike amount becomes lower than the industry standard; hence, it is okay. If the situation is otherwise, then you are in trouble since you will be answerable to your higher authorities.

Now, the question of the Appointment Letter. The fact remains that we can do little if a false appointment letter is given. This is a problem that should be sorted out at the time of issuing the Offer Letter. Do not give an Offer Letter unless you receive the previous Compensation Structure. To authenticate the Appointment Letter will be a very tedious and painstaking task.

Regarding the false document, you have every right to cancel the appointment. One thing, since you have discovered this, it is advisable to take such action because if someone else or during inspection higher authorities or someone else finds out, then the Candidate will directly point at you and say you knew it. You will only land in trouble. If you find it out, you have to take action. You can be pardoned for not knowing, but not for not taking action.

As for Salary, keep it at the amount that has been accepted by the candidate.

Regards,

SC

Hi Rekha,

I really feel that you should not entertain new salary details because you have offered her a salary as per the details provided by her during the time of the interview, which she has accepted. There is no point in discussing this matter with her.

Santosh Iyer

Dear Swathik,

Thank you very much for the valuable input. The whole issue started because we wanted this candidate to join in a week's time. So we agreed that the candidate may not be able to produce a relieving certificate if the ex-employer has an issue. On joining, the issues of the current salary being the same as what we offered came up, and the proof submitted was not sufficient to justify this. Now, we do not want to penalize the candidate as she left her previous job without relieving; also, we do not want to give her a chance to exploit the situation.

Regards,
Rekha

Dear Rekha,

There are two issues:

1) Regarding the CTC: There is no reason or logic in changing a CTC which has already been accepted. If you change once, then it will create a precedent and present employees will feel that they have got a raw deal since they have agreed and missed out on a larger salary.

2) Submitting false information: This is a serious issue and becomes more serious if people come to know that HR, after knowing it, has not taken any action and accepted the same. This will be a big blow for HR as well as the company's credibility, and an incident which is one-off will become regular as all candidates coming through employee referrals will do the same thing. If you had not found it out, it would have been okay; otherwise, people will take it as an accepted norm.

The decision lies with you.

Regards,
SC

Dear Swathik,

We conducted the reference check and found that what the candidate said was true. She was on a higher package than what she declared to us during the interview. So what we have offered her matches her previous package.
It was due to ignorance and not false information.
Should we reconsider the compensation as a special case?

Regards,
Rekha

Dear Rekha,

Again, the following points should be looked into:

1) Why did she knowingly accept the change on the same salary? Will you accept such a change for yourself? So, I feel a little investigation in this regard is necessary.

2) The whole concept of Salary Hike is a negotiating process where a company tries to get a suitable candidate at the best rate. The industry itself regulates the maximum rise it can give. So, it is not mandatory nor a rule to give a pay hike. You are making an offer and a person accepts that, and it should remain at that. This percentage depends on the company's capacity to pay, the employee's minimum expectation. There are cases where candidates have been recruited at a much higher hike than the prevalent standard, and sometimes, because of the brand value, employees have switched with lower salary pay. For example: Suppose a person gets Rs. 25,000 per month in a small IT company, and Google offers a job to the candidate at Rs. 23,000/- I will tell you the majority are going to accept this fall in rate and switch over to Google because of its brand value and growth prospects. So, it is nothing wrong on your part if a candidate joins your company without any hike; on the other hand, you should be proud that your company has a good brand value and the capacity to attract talent.

3) Yes, you can give a salary rise as a special case without creating a precedent, but if you take my advice, don't make any change but adjust the amount during the annual appraisal time, giving her an additional hike.

I will tell you a related incident that took place in one of the most reputed companies in India. A person was recruited for the position of Dy. Manager, and the situation was similar to your situation. What they did was verbally promised him that they would meet his demand. After three months, they issued a promotion letter promoting him to the Manager position along with a salary increment (the person was working exceptionally well). By this method, they did not have to break the offer acceptance procedure and at the same time satisfied the employee. In IT, you have the liberty to give such promotions.

Regards,

SC

Dear Rekha,

It is absolutely fine if you wish to revise the salary again after the candidate has joined. However, think about the future consequences. What will be your action plan to deal with future situations like these? As recruiters, we realize that we face multiple types of situations. If you have a plan and solution to be followed in the future, then go ahead with your decision.

According to me, there is no need to revise the salary since it was initially accepted by the candidate because this may raise problems in the future when people may start referring to this situation and some may want to take advantage of the same. Instead, I think the suggestion given by Swastik at the end is right; promise her verbally for a salary revision on a quarterly basis based on performance.

Regards,
Pooja