Shyamsunder Panchavati

Shyamsunder Panchavati
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Wednesday, September 20, 2017

Compensation package, that factor's retention and growth ( 8 components) 09-21

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When a we recruit a management professional. We generally base our evaluation and suitability for the job on the basis of history, which factors most of our decision making process. The history may also include the type of organizations their brand equity and their positioning and performance in the related market segment. The performance of the individual and the factors, the environment and the entire ecosystem.

The best evaluation based on the above and the other factors is also, at the best a notional evaluation, may be or may not be close to the actual performance and deliverables.

However, after the employee successfully completes the period of probation and is ready for absorption in the organization, an appraisal is made of the person’s performance to decide his compensation package. After taking into account all the statutory additions and deductions, We decide on a package for the performance.

I have a suggestion on the breakup of this package on the basis of various contributing factors, both long and short term.

Please go through it and suggest an alternative or a better combination. I thank you in anticipation of high value insights.

At the time of performance appraisal, the suggested breakup of the salary with a long time employee retention and growth perspective are as follows in my opinion.

You can pay a management professional for simply being on the rolls of the company, but let it not be more than 10 % of his salary 

He needs to be paid for the sincere efforts he is making in the right direction, which may or may be, as of now producing results, but most probably precursors for extra ordinary deliveries in the future. 10% of the salary.

How much his work and behavior at the work place is creating positive environment, and encouraging and motivating his colleagues at the workplace to upgrade their performance levels. 5% of the salary.

Dress sense presentably, how much of it goes with the company culture, how much of it adds to the corporate equity of the organization.2% of the salary. 

How does the person manage the work life balance? How much the either of the two impact the other? 5% of the salary. 

If the professional is successful in all the above attributes, how much do these abilities help in replication of successful professionals like him from his team. 5% of the salary

How well he is picking up management skills and improving on them constantly (Growth rate.), and making himself a likely for future succession management. 3% of the salary.

Pay him for his deliverables that directly contribute to the turnover and bottom lines. 60%

Now how to evaluate a person on these traits or attributes. It may not be possible for one person to evaluate a person on all the traits. You can have a team of experts on individual traits. A person can be evaluated once every three months by way of questionnaire, personal formal informal interactions, and through performance evaluation reports from the concerned managers.

We can design related metrics with well-defined parameters.

Before we evaluate the person, it is necessary to orient the person about the skillsets the organization is going to evaluate.

It also helps to be transparent  about the configuration of the package, and after the valuation the scores the professional has attained in various parameters. He will be able to know about his strengths and weaknesses and will try to improve on his weak links before the next evaluation.

THIS AMOUNTS TO EQUAL OPPORTUNITY POLICY BEING IN ACTION.

This article deals only with the components of the compensation package. The dispersal method, methodology and components are a subject of another article some other day.

Your views are very important, please contribute.

Best wishes,

Shyam


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