Struggling with Salary Gaps in a Small Company: How Can I Address Employee Concerns?

Hi,

Ours is a very small company established around 15 years ago. We had hired a personal assistant at a salary of 4000/- and an accountant at a salary of 5000/- two years back when there was not much IT in Bangalore. However, today, if we hire a front office executive, the average salary is around 7000/- to 8000/-. How can I remove this difference? I can't give them a salary hike so that their salaries are equal to the current scenario, especially when the market is low.

What should I do? Please help.

Dear Neha,

You have to remove these differences by increasing their salary; otherwise, they will go somewhere else. You have to give them their marketing worth.

Thanks,
JS Malik

Sir,

But I can't give them this kind of salary increase. Is there no other way? We have cases where one accounts person is getting 5k and the other one is getting 20K. We have managed to maintain that by separating the profiles slightly. The lower-salaried person looks only at the salary PF and other cash vouchers, whereas the higher-paid person has to go out and collect cash from other people like suppliers and the bank.

But the front office and the PA problem is difficult. Moreover, the responsibilities of the PA are going to be given to the front office person also. And accidentally, the front office person is a referral from PA.

Please suggest.

Dear [User],

You should have analyzed the problem before you hired. Now, what you can do is give them a hike in order to keep their morale up and assure them that it will be taken care of at an appropriate time.

Regards

Hello Neha,

You must introduce some kind of salary grades and salary scales for each grade.

According to their experience and the market price for these jobs, adjust their salary to be at par with the market to justify the increase in pay.

Because your employer will not accept random salary increases without proper feedback on how these people are behind market salary for the positions they hold in your organization.

This may eventually result in sudden resignations and the need for recruitment or replacements at a higher price if these people leave the organization. If these individuals have acquired efficiency and perfection, a new recruit or replacement will take at least six months, and the loyalty these individuals have shown to the organization should be rewarded to retain such talented individuals. The employer has to be convinced that just because these individuals work for us does not mean they are inefficient, but rather they are underpaid because we did not value their worth as per the market. If these individuals move to another organization, they may be offered salaries as per the current market price; therefore, salaries have to be adjusted to be in line with the market.

Regards,

Rashid

I have to agree with the others - a salary hike is the best option to bring others on the same level. It is the ethical thing to do. Compare JD's, do performance reviews; this will also be of help.

We have an occupation dispensation system that evaluates qualifications and experience, either or both if a person has, and upgrades them accordingly. If a person is also on the same level for so long, depending on the consistency of their good performance, an upgrade is possible too. Even upgrading in salary is possible if the level of work is the same as a higher-level person or a person with a higher salary. There is always a way to do this. The cost of living will always rise.

I should think that private companies have more incentives to succeed.

Dear Neha,

Hiring with such a haphazard salary scale will definitely create problems for employees. You must have a policy regarding the salary scale. Giving increments to the old staff - if they deserve it - will help bridge this gap. Moving forward, being mindful and introducing a salary scale based on designation/work specifications will benefit you greatly.

Regards,

Pankaj Chandan

Dear Neha,

I want to know from you, why are you bothering about the difference in their salaries? As an HR professional, you should not compare the salaries of the employees because salaries will vary based on the job profile and job specifications.

You can manage them like this: A front office executive should be good-looking, have good communication skills, and hold the patience to attend all calls and communicate the information to respective departments. As a PA or accountant, the aforementioned qualities are not mandatory.

You can differentiate the job descriptions in this manner, and then there will be no chance of comparison. If employees ask you about their salaries, you can explain this to them while also considering the employer's perspective.

Hope this information can help you.

Regards,
Sabitha :)

Dear Neha,

To remove this salary difference, you can change their CTC (not monthly salary). You can add an amount 'x' as a year-end component, i.e., (20/30)% of the 12-month salary, which is payable at the end of the financial year. I hope this will solve your problem.

Thanks,
Shivani