Parity : New Hires With The Existing Employee Base : Salary Fitment

Dear All,

I have a query regarding salary fitment. We have workmen in our plant who are part of the workmen cadre and report to the staff cadre. Currently, we are looking to implement a workmen growth plan to allow those with approximately 15 years of experience to be promoted to the staff cadre.

The challenge we are encountering is that the salary of a workman with 15 years of experience is notably higher than that of a new entry-level employee in the staff cadre. Could someone please assist me in determining the appropriate salary fitment for this promoted employee?

Dear Paradoxical,

Your name seems to fit your query :) This is quite a common phenomenon that happens across the industry and is quite a delicate problem. Also, when the workman has been working with you for 15 years, some technical skills would have been added, some training undergone that have been added, so he would not, per se, be equal to an entry-level employee of staff cadre, but maybe a junior officer or officer level. If you have this roadmap, then it will be required that you at least start upgrading their computer handling skills, documentation skills one year prior so that when the staff do not feel dejected in comparison and demotivation doesn't creep in.

Regards,
Pratima

Dear Paradoxical,

Have you identified the min-max for the salary band? Parity would be easy when you draw the range. Just as Pratibha has mentioned, an employee working for you has been upskilled and trained. On top of that, the loyalty bonus is often disbursed not as a lump-sum payment but through a gradual increase in the salary. Please identify the reasons; you will be able to cite the growth map and add to the motivations of your employees.

Wish you all the best!

Not only should the existing basic pay be protected, but since the employee concerned is being entrusted with greater responsibility, in such cases, extra incentives in token of appreciation for performance are also necessary. This can be equal to two or at least one annual grade increment of the next higher post.

Dear Mr. Paradoxical,

It is a fact that the rates of wages under the Min. Wages Act are the same for the persons in a particular category irrespective of the number of years of experience, responsibility, and accountability attached to the particular job/post. After all, it is the minimum wage. If you need good quality manpower, better rates than the minimum wage rates should be paid along with career growth. There cannot be a condition that the fresher as well as the old hands shall draw the same wages. If the company follows the same wage policy, the company shall end up as a training ground for skilled manpower for others to poach, leave alone the fate of the company.

Hence, my suggestion is that you formulate a good policy for hiring & retention of manpower with a succession plan so that the company prospers along with the growth of employees. Don't fall prey to emotions of fresh hands over higher compensation to old experienced & skilled hands.

Regards.

Hello Paradoxical123,

Like the other members have pointed out, this sort of situation is quite common whenever such employee-friendly steps are adopted. But such promotees are not treated on par with the first step in the staff cadre for many reasons, such as:

1. Like Pratima mentioned, this promotee category will have added quite a few job-related skills that the entry-level staff employee wouldn't have. However, computer and documentation-related skills would be minimal.

2. Like Cite Contribution mentioned, the loyalty factor is already 'tried and tested' for such employees, while the entry-level staff employees are yet to prove it. But how you embed this aspect/factor into the salary structure will need to be figured out since this aspect can't be directly exposed as it may lead to comparison situations.

The best solution/mechanism for your situation can come from HR professionals who work in PSUs—most PSUs have such a model in vogue. As far as I can recollect, such promotees are usually fitted into the second or third level of the staff cadre (equivalent to 2-4 yrs exp for the entry-level staff employees) with the associated salary structure. I can't give more details than this since I was in the technical line when I worked in a PSU years ago (so never focused on such aspects).

All the best.

Regards,
TS

Dear Member,

First of all, I would like to appreciate the idea of promoting "workmen" to "staff." You have recognized that one of the fundamental human needs required for motivation is "growth" and "social recognition."

After such a long (15 years) association with a company, if the employee possesses the competence required for the next level (be it supervisory/staff level), the company should definitely proceed.

The issue of disparity is "perceived" as it is not comparable. If you are in manufacturing, I am sure in most cases the workmen would possess the "must-have" skills (technical skills) much more than the entry-level engineer, and the entry-level engineer might possess "nice-to-have" skills like communication, etc., more than the workmen.

The simple rule is to promote him to the first-line executive cadre with X% of a rise. Simultaneously, do away with irritants that are attached to "workmen" - culturally and legally - to the extent possible.

Differentiate both categories with the "career growth path" and provide faster growth opportunities to professionally qualified engineers based on criteria like performance, potential, qualification, etc.

Regards,

Shailesh Parikh

Vadodara, Gujarat

9998971065

I admire you for providing a career even to workmen cadre. What I understand is that the staff cadre is a higher cadre than the workmen cadre. Therefore, the promotion for workmen means elevation to a higher cadre. If so, you need to place them at the first stage of the staff cadre but not at the stage that is commensurate with their 15 years of service since the service put in by them is in the workmen cadre but not in the staff cadre, and the skills and qualifications differ for both the cadres. However, one of the principles of promotion is the protection of pay on such promotion. This process is called fitment. Please see whether you can adopt the following formula to avoid any anomaly since you have not furnished any details of salary or pay scales of both the cadres.

1) Find out what is the gross salary drawn by the workman at the time of promotion.

2) Find out what is the gross salary of a staff employee at the entry level.

3) The difference can be paid as 'Personal pay'. This protects their existing pay.

4) You can grant an extra one increment at the time of fitment as an incentive for promotion. This allows them to draw higher pay than what they are drawing, which shall naturally happen on promotion.

B. Saikumar

HR & Labour Law Advisor

Mumbai

There should be career growth opportunities for the employees irrespective of categories so that the employees are motivated, and retention percentage is increased. If a workman having worked for 15 years has the requisite potential to hold the responsibility of a staff, then it should be carried out. Regarding the fixation of salary in the higher grade, while his existing salary needs to be protected, a proper fitment needs to be fixed as per the fitment strategy in the staff category. One should not forget the contribution of such a worker for the last 15 years, which should be taken into consideration while fixing the fitment, irrespective of the fact that the fitment so considered will be more than the existing staff category.

Regards,
BK Mohanty
Cypress Management Associates
9937822563

Dear Member,

This is quite common in my organization (a central govt enterprise). In such cases, the basic pay of the promotee is protected, and an increment from the new scale (that of the staff cadre) is given as an additional incentive. Thereafter, the increments are as per the new scale.

S.K. Limaye, MBA

Dear Paradox et al,

It always happens that a promotee to a higher cadre draws more salary than a direct recruitee to the same cadre. Hence, there should be a scale of pay with min., max, as well as a rate of increment defined, and employees are to be fitted according to their experience and the salary drawn in the pre-promoted cadre. Promoting a workman with 15 years of technical experience to a staff function along with an adequate salary jump is a good career growth policy and would be definitely motivating to the employees in general.