Is This Employee Taking Advantage of Our Small Company or Just Being Professional? What Should HR Do?

CASE:

A candidate with good communication and interpersonal skills joins an organization that is developing. When he stepped in, he does not have any exposure to the corporate culture and practical knowledge of the work that happens. He was given a chance in this smaller organization. The candidate, being good, picked up the pace in 6 months and got habituated to the people working there and shares a very good relationship with everyone. In this process, he was given many responsibilities, and the good part is, he accepted them and was handling them well. However, all of a sudden, he started feeling that he is being paid less even after holding many responsibilities and thought of changing his job right after six months of joining.

Now, if we think from the organization's point of view, it gave him the opportunity to work and responsibilities to explore things. It should be noted that he might not have learned as much in six months if he had joined another company since big organizations have specialists for every area. Whereas, being a smaller organization, he was given many responsibilities and hence the opportunity to learn more things in less time. He has become a key person within a very short span of time. Now, it is a tough time for the organization if he leaves.

The employee also knows this and is ready to continue if his salary is revised. So, is that particular employee taking advantage of the smaller company, or is this what is called professionalism these days? The reason for the above case is smaller organizations cannot afford backups for the employees as big MNCs do. It does not make much difference if a person leaves an MNC, whereas if a well-settled person resigns from a smaller organization, it shows its effect.

What can be done from HR's point of view to avoid these kinds of situations? This is something I have noticed myself and have also heard about from many others.

Please do comment with your valuable opinions.

Hi,

This situation is very prevalent in small organizations, and most of the time it involves freshers who are highly energetic and raring to make a mark. Looking at their dedication, the energy levels they put into the organization tempt it to offer them more work, which is a mistake.

A fresher would always join the organization to get started and climb up the success ladder as soon as possible. By the time they finish 6 months, they get to know their worth, their importance in the organization, and their value outside. By this time, they also realize that nobody in this professional world is out to do charity.

Lessons to learn:

1. Never let a FRESHER handle many responsibilities because they are here only for a short stint.

2. Freshers need to be frequently shown the growth path - this keeps them happy.

3. Always offer a benefit/incentive with an additional responsibility so that they should never feel that they are underpaid.

4. Talented individuals always get more responsibility irrespective of the organization (small or MNC) they join.

5. If an employee is extremely good, he/she will expect a raise again - be prepared :)

Thanks,

Yash.

True Yashee, that this situation is a general occurring. But I feel that as an HR, it's our responsibility to counsel such behavior as not only is the company at a loss but even the employee loses in the long term.

Instead of restricting the responsibilities to be given to the fresher, we should be able to channelize this high energy and make maximum use of it as well as motivate their loyalty. Secondly, create more barriers for exit. Include a performance bonus factor with a review after every quarter. There are many retention policies that help us, and at the same time, we can create a nice workforce.

Regards,
Smitaa

Hi, This situation is very prevalent in small organizations, and most of the time it involves freshers who are highly energetic and raring to make a mark. Looking at their dedication, the energy levels they put into the organization tempt us to offer them more work, which is a mistake. A fresher would always join the organization to get started and climb up the success ladder as soon as possible. By the time they finish 6 months, they get to know their worth, their importance in the organization, and their value outside. By this time, they also get to know that nobody in this professional world is out to do charity.

Lessons to learn:
1. Never let a FRESHER handle many responsibilities because he is here only for a short stint.
2. Freshers need to be frequently shown the growth path - this keeps them happy.
3. Always offer a benefit/incentive with an additional responsibility so that he should never feel that he is underpaid.
4. Talented individuals always get more responsibility irrespective of the organization (small or MNC) they join.
5. If an employee is extremely good, he/she will expect a raise again - be prepared :)

Thanks,
Yash.

Hi all,

I don't agree with Yash's points of view because anybody, including oneself, it is the nature of a human being that its desires are unlimited. You get one thing and then move on to another one. If you put yourself in that place, then your actions would be justified in your sense because that is your view.

In my view, a substitute should be there, and also, he should be compensated according to the market rate. If this is not done, either you recruit a fresher or an experienced fellow, nobody will stay.

Sant Singh

Hi Sant,

I agree with you. I only meant to comment on the shifting tendency of freshers compared to the experienced ones. Experienced people are not always on the lookout, the way freshers are, due to the following reasons:

1. They realize after a certain point that too much shifting is detrimental to their resume/career.
2. Experienced individuals are generally more mature and understand well that a mere hike is not going to make a whole lot of difference in their lives.
3. Since experienced people come with a particular experience and work culture, they cannot easily adjust to any environment.
4. At home, experienced individuals generally have more responsibilities, which is another reason they find it difficult to keep moving.

Yash

I suggest that you can hold the bond or original certificates of the employee for about 2 years and then release them.

Hi Friends,

I regret to go with Cgnanij's comments, because by holding the certificates and by a physical bond, I don't think we can retain talent and propagate the employee's performance.

In my real time experience I have seen a number of people including youngsters sticking with the organization just because of the work culture and exposure that they have been getting. Learning gives more satisfaction to an employee and the boss is the major cause for attrition.

Issues with the bosses crop up when they start finding their subordinate as a threat, by this they avoid collaborating for success. This normally hurts the individual and makes them to look for the change. Provide more opportunities and visibility to the employees, make them feel valued, show them their career ladder, have a transparent system and a open communication channel, have periodic reviews with juniors, take their value additions, keep them engaged with challenging work. If we can do these youngsters can be converted to real assets than considering them as threats.



Regards

Sathiya

All are correct from their point of view, but I hold a different view. Whether it is six months or sixteen months, talent should be rewarded. If the person has got potential, he should be rewarded, of course, after negotiation. Others have stated their point of view, which is also correct, but if an extraordinary talent has to be retained, he should be rewarded accordingly (from a professional point of view).

Regards,
NKT

Dear,

The problem is not with the guy, rather it was with the selection of such a guy. Recruitment is always made keeping in view the company's objectives and its culture. A fast-paced company cannot keep a slow-moving employee, and a very smart/intelligent employee can't stick with any small/slow-paced company. In a small company, if a new position is generated, the director him/herself is involved in the supervision of the activities. You can't hold this guy for a long time within this organization even if you revise his pay. Currently, revise his pay and also give him an assistant to train. In the future, always recruit any guy whose family background or caliber is equal to the company or its future plans.

Tariq

I agree the case represents the case today. However, I don't agree with either of the views presented above in totality. I think it is my view that we must map the career plan for the new fresher. If he shows talents and is able to perform, we must fast track and adequately compensate the employee as well. It is even more critical for small companies to retain these brilliant talents. The employee should be compensated as he is burdened with additional responsibilities. Think of it this way: if the company loses this person, they may have to replace him with two employees' salaries! It is even more critical to keep up and give him enough challenges and responsibilities to retain him; otherwise, he will lose interest but only until the time he can sustain. Past performance is not an indicator of future success! :)

Hi all,

I totally agree that no organization is doing charity. So it can be seen from the perspective of a freshly recruited person as well. If they are giving their all to the company—i.e., their energy, talent, and being equally productive—then they deserve compensation, perks, hikes, and incentives for their efforts. It doesn't matter if they are in a learning phase; these hikes are part of performance management. These add-ons also help keep employees engaged.

If the organization is small or medium-sized, its growth is inevitable if it caters to the needs of its employees. This is where the HR department comes into play, acting as an interface between the organization and the employees.

This approach may even help reduce the attrition rate, as "Knowledge moves with people."

Regards,
Anupriya Bhattacharya

Hi,

NK Tiwari is absolutely right. The case is about an employee who has done extremely well in a short span of time. Whether he would have learned in bigger organizations, highly theoretical. He has performed, be bold enough to accept and reward him. You are worried about those who are in the same cadre; if they quit, you can replace. It is difficult to get talented people for smaller organizations. So retain him.

Dear friends,

In today's corporate world, remaining competitive is essential for both the organization and its employees. In this particular case, the employee has learned to perform at a faster pace than usual. Whether the organization is large or small, the fact remains that the employee is a high performer, a trait recognized by the organization. It is only fair that the organization acknowledges his worth, and I believe they should reward him for his achievements rather than demoralize him. This action also sends a strong message to other employees that performance will be rewarded.

K. S. Narayan

Hello Everyone,

That was one really interesting discussion. Some points which one can learn from this case study:

Fresher or experienced, talent has to be rewarded.

It is the responsibility of the organization to ensure that such talented youngsters are retained.

The youngster must be made aware that the organization has encouraged and given him the opportunity to learn. Just six months' experience in one small organization does not mean he has learned everything.

Retention cannot be achieved through a legal bond; it can be made possible by having a psychological "contract" with the employee.

Once the company realizes that they cannot retain him at the same level of enthusiasm with which he started, it is better for them to let him go. A frustrated employee does more harm than good, and thus the organization should have a system of developing employees for potential vacancies.

This case gives us insight into one of the main HR challenges of SMEs.

Thanks for posting the case.

Kirti

First of all, I'd like to congratulate you for addressing the current and most serious HR issue: ATTRITION Rate due to the ongoing Industry Boom.

A fresher can readily find opportunities in small organizations. However, when a small or large organization provides an opportunity to a fresher, it is crucial to identify their potential and regularly acknowledge them either through cash rewards or other incentives, especially if the organization is small. If the individual is competitive and shows the potential to become a key member of the organization, it is essential to nurture their growth. Throughout their learning journey, it is important to instill a sense of commitment towards their career and clarify their growth prospects within the company to ensure long-term retention.

Nevertheless, the organization should also be prepared for the eventuality of the individual leaving for a better opportunity. Relying too heavily on one person may lead to irrecoverable losses if they decide to move on.

Thank you,
Sneha Naphade
Assistant Manager - HR

Well said, Sathiya,

I agree with the point that "Boss is the major cause for attrition." I have seen several people who left the organization just because of the above reason. Most of the problems come with the experienced boss who has been working for several years in the same post.

VR Kadam

I think the organization needs to do an introspection of its practices regarding joining time orientation. Salary cannot be the sole criterion for separation within a period of 6 months. What makes the employee think that the organization is incapable of further enriching his learning?

As far as leaving is concerned, no employee can be legally stopped from leaving an organization provided they have not done something illegal.

AS

Hi,

I believe that such an employee should be motivated by the company through a hike in their salary and by promoting them to a responsible position in order to boost their morale and productivity. The organization should make efforts to retain such an individual so that the company does not face any kind of loss due to a lack of skilled manpower.

Regards,

Aparna
HR Professional

It will be better if the expectations are set when the additional tasks are being handed over. No point negotiating them later and finding a mismatch between his expectations and company affordability.

Pragathi

The basic underlying fact is that no one is on a job to do charity.

After handling many responsibilities and doing a good job of it, this person is asking for a raise.

Let's not think only from the organization's point of view. The person's capacity to do the same also needs to be considered.

Besides, if the person has benefited by getting the exposure he did in the organization, so has the organization with the services rendered by him.

The person is bound to feel that he is being exploited and underpaid.

Look at this from this viewpoint:

1. You are getting more work out of one person, which otherwise would have needed 2 or more people to handle.
2. You would end up paying more if you had someone to handle every responsibility that this person in mention is already handling.
3. Would his replacement be as sharp, intelligent, and capable as him? The chances are 50% maximum.

What you will as an organization be doing is paying him his worth while he will be happy with a raise and find his efforts fruitful.

Where the exposure is concerned, the credit would go only to the employee as it is his capability that has secured his position.

The organization has found in him a person who can effectively multitask, which is a rare capability nowadays.

The fault lies with the organization for giving so much power without any backup and hence this situation today.

The only way out now seems to be either to negotiate a salary raise or then part ways and start from scratch.

The latter will be an opportunity to correct the mistake made earlier and here you could relieve the person only after he has done a successful handover to the replacements you have found for him.

Decisions have to be made by the management taking into consideration the juncture at which they are now standing and whether it would be acceptable to suffer a minor setback by letting the employee go or continue.

If the employee continues, make it a point to sign terms and conditions wherein he would not need to hold you at ransom like he can afford to today, which means however small the organization may be, organize for backups in the vital areas of the organization.

Regards,

Gouri

Dear Cgnanij,

It is not fair to ask for a bond even though a good number of companies do so to stop or prevent employees, especially freshers, from job hopping. It is human tendency to move on, and let us accept this fact. Companies can look for other ways to deter employees from leaving.

Coming to the case in question, new entrants must be encouraged to stick to the company by motivating them with appropriate rewards as and when it is due based on individual needs. Furthermore, HR personnel must use imaginative ways to help employees feel important, needed, and valued.

As far as responsibilities are concerned, it is important not to overload. The golden rule to follow when additional responsibilities are given is to compensate adequately; this is a must. Lastly, a good number of new entrants today continue with organizations because not only do they learn a lot, but they also grow with it.

Hello friends,

Currently, I am working on a project at one of the local IT-based companies, which is newly established. Although I cannot disclose the name of the company, I would like to express my observation about FRESHERS being recruited with lower pay when compared to the industry standards.

- FRESHERS, when groomed/trained within the company with an objective of reducing the problem of attrition, always prove to be successful.
- The compensation structure within an organization should match industry pay standards.
- Pay should comprise fixed pay and variable pay (variable pay should be linked to individual roles and responsibilities).

CASE ANALYSIS:

The company discussed here has failed to design its compensation structure to match employee expectations. The HR department should initially make a comparison of the cost-benefit analysis of increasing the pay package of the employee and the cost-benefit analysis of recruiting a new employee to the same post. Since the size of the company is small, separation of one of the key personnel of the organization may prove to be disastrous. Moreover, when an employee with good employee interaction leaves an organization, he sets an example for leaving the organization due to inadequate compensation. This may force other employees to think along the same lines. Thus, the cost-benefit analysis of an employee leaving an organization is one major task that should be looked upon by the HR department.

Regards,

Natasha

natashapb01@yahoo.com

Hi all, I would like to emphasize one thing in this case. Whether a person is a fresher or experienced, according to the market value and demand, they will consider a change. You all know very well about change management. Within a short span of time, human minds compare themselves to what they are in the outer world, irrespective of the size and culture of the organization they work for. Of course, satisfaction is a major criterion in retention policies, but it can be overridden when considering the opportunities and market demand for the professional.

We cannot afford much for an individual going beyond the salary slabs of the organization we work for, but we can modify the incentives and benefits given to them to be transparent and help them achieve better results, also known as KRA. As one of our friends mentioned about experienced individuals, they don't change.

Hello,

I agree with what you said. Even my company is very soon in the near future going to have this kind of problem. But I have prepared myself and my company to withstand this problem. I have included very simple four steps in my company policy:
1. Succession Planning
2. Job & Task Rotation
3. Spreading the work across the team instead of concentrating on one person
4. Maximum automation of routine operational processes and tasks.

Thank you,
Octavious