New Hires on High Salaries Underperforming: Should We Let Them Go or Review Their Pay?

Dear Friends, We have recently recruited some technical personnel in our company who came in with a salary bracket well above our standard structure. This situation has created a certain imbalance within the company. We have now discovered that these individuals, who joined on higher salaries, are not performing up to the expected level. This is also creating a negative impression among the existing staff.

Seeking Suggestions on Addressing Salary and Performance Imbalance

We seek your suggestions on how to address this issue. The new employees are currently under probation. Would it be advisable to consider asking them to leave? It is worth noting that they have relocated from a different area. Alternatively, should we conduct a performance review promptly and communicate their underperformance, considering reducing their salaries to align with our standards?

Your immediate response is greatly appreciated as we anticipate this issue escalating in the days to come.

Thank you,

Regards,
Prabin
[Email Removed For Privacy Reasons]

Dear Prabin, This is a very serious problem. You should introduce monthly appraisals for all team members starting from the date of joining, not just for those who joined on a higher package, but for all staff. This will help them understand how they are performing and the expectations set for them. Providing this feedback will give them an additional 3 months to showcase their performance and prove themselves. If they are unable to meet expectations within this extended timeframe, until their probation period concludes, it may be necessary to ask them to leave based on their performance. The decision to let them go will depend on the severity of their underperformance. In some cases, you might consider extending the probation period by 3 months.

I would not recommend cutting their salaries as this could significantly demotivate them, leading to decreased performance and potential absconding from their duties. Salary reduction can have various adverse effects on their morale and commitment to the company.

Thanks & Regards, Shipra

Haven't you done a risk analysis before you hired them? The learning curve of every new hire takes time to correct. You need to adjust until then. Even if you have to discontinue with them, please out-place them. Avoid firing them; it will increase your hidden costs in the long run.

As you have mentioned they have relocated to work with your organization, please keep this in mind. The way you treat them now sets the message not only outside the organization but inside as well.

The dissatisfaction of your existing employees stands obvious. However, that cannot be the reason why you need to fire your new hires.

Depending on your sector, please take a block period of a minimum of 18 months for your employee life cycle. No matter who you hire, please check whether you can pay salaries for this duration. If you can endure that, then only you should hire. In case you can't pay for that long, please involve consultants. This would lessen your burden and avoid complications such as this.

Regards,
Cite Contribution

Hey HR Friends,

I have observed this trend in almost all the companies that I have worked with. The company hires big shots and then finds out they are not fit for their environment. This creates rifts among the existing staff. Existing employees complain that they are not given enough compensation, but the new hires are given better pay. The existing staff starts showing non-cooperation, and the newcomers are not welcomed.

Hence, companies must be very careful in appointing new staff.

Regards,
CS Mukesh Tank

Please check with your company if there is any prescribed policy for non-performing employees. Cross-check their JD at the time of appointment. Without having performance indicators, you can never say an employee is working or not. A capable employee need not work round the clock; what really matters is the wealth generated by the employee in the months they have been working. As far as the other employees are concerned, it is not their job to decide if the new joiners are working or not; it is the reporting authority's consideration. They are the ones to give the key ratings - if the result is positive, then you can retain them. If it is negative, no matter what, get them out of the company through the proper channels and procedures.

Regards,
Satya

Understanding the Case: Two Distinct Aspects

As far as I understand the case, it has two distinct and different aspects:

• People have been hired at higher salaries than the norm in your company. In this case, the fault is that of the organization, and it is not ethical to penalize the employees. The organization will have to suffer the consequences that may be far more serious than one is able to realize and may have far-reaching HR consequences.

• The people are incompetent. If the company finds them incompetent, it should give them a fair chance to improve (by providing proper training). If they do not show any improvement, their services should be terminated. Please do not get biased due to the disparity in pay vis-a-vis the others.

Dear Prabhat, the problem you are facing is really serious, and before you take any steps, you need to consider all the pros and cons of the situation. Asking an employee to leave the organization can create unrest among all other team members and can have a negative impact on the company's goodwill.

Suggestion: Start Succession Planning

I suggest starting succession planning. This approach will keep all the staff motivated and will not become a liability for the company.

Thank you.
Regards