Salary Caps for Long-term Employees with Diplomas: Is It Fair or Necessary?

At our organization, 10 to 12 employees have been working since the beginning. They are experienced but have lower educational qualifications (they have Diplomas and ITI). Currently, their salaries increase every year. Is there any cap we can implement to keep their salaries the same?

You haven't mentioned the information to the fullest. Have you? Please clarify:

1. Number of years each employee has worked?
2. Are the salaries increased based on performance appraisal?
3. Is there any HR personnel paying attention to this issue?
4. If the HR has been present from the beginning, why hasn't this matter been brought to the management's attention?
5. What is your management structure or kind of business?
6. Who decides the salary of these employees?
7. Have you raised this matter earlier with the concerned parties?

Let us know the above. Without a clear elucidation, no one can fully understand the matter.

Thank you.

Kindly provide more details regarding the nature of these non-qualified employees and the inconveniences caused by their salary increase. In the manufacturing industry, qualifications in most mid-level managerial positions are merely a criterion for entry, with the individual employee's performance being the primary focus thereafter. There are instances of non-qualified/non-technical individuals achieving significant success in various sectors such as machine tool building, foundry, engineering companies, and service industries. Therefore, it would be helpful if you could clarify the rationale behind imposing salary caps.

Kind regards,
Dayanand

Before you take ANY action to cap their salaries, please consider:

What Substitute is There for Experience?

You state that they have been with the organization from the beginning. This suggests that they are valued and hardworking, but now they are to be punished for not having a higher academic qualification! What will this do to morale in the organization?

Once you cap their earnings, they will leave, and other companies will hire them for their EXPERIENCE.

Consider These Examples:

- Abraham Lincoln, lawyer, U.S. president. Finished one year of formal schooling, self-taught himself trigonometry, and read Blackstone on his own to become a lawyer.
- Amadeo Peter Giannini, multimillionaire founder of Bank of America. Dropped out of high school.
- Andrew Carnegie, industrialist and philanthropist, and one of the first mega-billionaires in the US. Elementary school dropout.
- Charles Culpeper, owner and CEO of Coca-Cola. Dropped out of high school.
- DeWitt Wallace, founder and publisher of Reader's Digest. Dropped out of college after one year. Went back, then dropped out again after the second year.
- Frederick Henry Royce, auto designer, multimillionaire co-founder of Rolls-Royce. Dropped out of elementary school.
- George Eastman, multimillionaire inventor, Kodak founder. Dropped out of high school.
- Ray Kroc, founder of McDonald's. Dropped out of high school.
- Richard Branson, billionaire founder of Virgin Records, Virgin Atlantic Airways, Virgin Mobile, and more. Dropped out of high school at 16.

And Indians are Not Exempt Either:

- Dhirubhai Ambani: He was a billionaire and Indian businessman and founder of Reliance Industries Limited. He, shockingly, never attended high school. He is one of the most potent examples of such people in India.
- Sachin Tendulkar: Master Blaster, Sachin Tendulkar is the god of cricket in India. He almost attained an unbeatable and legendary status just at the age of 36. He never went to college. He is compared to the likes of Don Bradman and Brian Lara and other cricketing greats!

There are many more if you care to search the net.

Regards, Harsh

[QUOTE=citec1;2058609]Hi All, At our organization, 10 to 12 employees have been working from the beginning. Although they have limited education (Diploma & ITI), they are experienced, and their salaries have been increasing every year. Is there a cap we can put on them?

Performance Over Qualifications

Dear Member, If output and performance are not degraded, please do not worry about their qualifications. As an HR professional, try to retain the workforce. We should not judge people solely based on their qualifications; sometimes, qualified individuals may not excel in lower-level tasks. Always evaluate individuals based on their performance skills and the required output.

Regards, S.Rao.

Balancing Experience and Fresh Talent in Organizations

Please remember that you cannot replace employees with many years of experience with highly qualified personnel who have less or no experience. Both have to coexist in any organization. These days, youngsters don't even stay in organizations beyond 2 to 3 years. Longevity or loyalty to the organization is an asset to the company, as long as their knowledge and skills are constantly upgraded.

Therefore, you can keep infusing fresh young talent, but at the same time, don't ignore people with longer years of service. Don't put a cap on them. If they leave the organization due to frustration, it will be your loss; they may find an alternative elsewhere, but you will end up in a bad situation.

In India, though we have plenty of graduates and postgraduates in any discipline, there can be no substitution for a time-tested, trustworthy, and dedicated workforce, even if they are underqualified. No statute prohibits encouraging them with monetary or promotional incentives, and there should be no caps on such incentives either. Applying a cap would be unfair to those who show sincerity and dedication, as it could act as a disincentive, causing them to seek opportunities elsewhere. However, in statutory positions, there may be no escape from fulfilling necessary duties.

To address this issue, many employers opt to engage individuals holding the required qualifications or competency certificates on a per-signature basis, allowing them to work without being in full-time employment.

Regards,
Kumar S.