Once there was a concept of life-time job. People used to join one organization and would work
there for rest of their life. They would grow with company. Loyalty and relation were given more
preference than anything else. Performance, compensation, and growth were important but not as
important as emotions and brotherhood. However, now things have changed. More so in last THREE
decades. There seems to be a tussle, a kind of tug of war, between performance and compensation.
Loyalty, emotions and relations appear like things of ancient time. For an employee, an employer is
as good as his last increment; while for an employer, an employee is as good as his performance in
last quarter. Both can replace one another at any time and as many times during their life. Who is
going to win this war? Will there be any winner? It is difficult to say.
Employees don’t want to link their compensation and growth with their performance. Every year
they expect certain percentage of increment. They must get promotion every couple of years. And
this should not be linked to their performance. They have irrational comparisons of their
compensation. They compare their salaries with their colleagues across functions and with their
peers across industries. They are not willing to buy concepts of educational backgrounds, relevant
experiences and size or revenue of organization.
Following factors can influence your compensation in an organization –
1) Relevant experience – Your total experience is irrelevant. What matters the most is your
relevant experience in given role and industry type.
2) Education qualification and Grading of College/Institute – It matters a lot. There is
basic qualification requirement for each role. Grading of college or institute implies the
quality of training, grooming and knowledge you might have received and hence plays an
important role. Same holds true for mode of education – full-time or distance learning.
3) Organization Type and Revenue of Organization – A start-up, matured and multi-
national organization will follow different compensation structures. Revenue of company
also plays an important role. One cannot compare compensation of one role in a 10 million
USD company with a 100 million USD company. That is insane comparison.
4) Internal Equity – There cannot be any comparison between same job titles in two different
functions. For example, internal equity calls for same salary range for two sales managers in
same city. However, one cannot compare salaries of Sales Manager with Production
On other hand, employers don’t want to talk about compensation and benefits in isolation. Growth
and compensation must be linked with job responsibilities and accountabilities. Loyalty alone is not
sufficient. Organizations require loyalty with consistent track of performance to help you grow. You
cannot move to next level just because you have spent certain numbers of years in one position or
role. In schools and colleges, getting 60% marks is considered as first class and getting above 75% is
distinction. However, this is not true in corporate world. You must score at least 75% in your annual
assessment to be considered for any increment. You must consistently score above 90% in your
annual assessment for at least THREE years to be considered for promotion to next level in
hierarchy. Irrespective of your score in annual assessment, as a standard industry practice, you shall
be classified as High Performer, Average Performer and Low Performer in the ratio of 20:60:20,
which eventually implies – Must Retain, Try to Retain and Let Go.
Following factors can influence your growth in an organization –
1) Career Planning and Competency Development – Employees are responsible for their
own career planning as well as developing necessary skills and competencies required to
move up the hierarchy. You know what you want in your life. You know what are your
strengths, weaknesses and constraints. It is not the responsibility of an organization to plan
or develop your career. Organization does arrange for development programs for
employees, however, those programs are planned as per growth aspirations of the
2) Job Descriptions and Skill requirement – Organizations shall prepare job descriptions
and skill and requirements for each role. These shall be made available to employees for
them to know where they stand in the organization and what they need to do to move up in
3) Assessment Centre – There is a need to have assessment centres in organizations to assess
readiness and competencies of employees required to move to next level in hierarchy.
Nothing can be more painful than losing an employee to the market who was ready but not
4) What are you looking for?– Employees shall be very clear about what they want. They
must not look for right things at right places. Start-up companies provide an opportunity to
create something large from scratch; while matured MNC’s gives an opportunity to expand
your horizons. In start-up’s, financials are big constraints; while in matured MNC’s,
bureaucracy can be a hurdle for your vertical growth. Final choice is yours.
5) Risk taking abilities – Relocation can be a big hurdle in your career growth. Organizations
might give you the kind of growth that you need but you can squander that opportunity, if
you are not willing to relocate. You must be willing to take risks.
6) Job Satisfaction – It is the responsibility of organization to give you clear job description,
tool to perform your job efficiently and set non-discriminatory performance management
system, however, it is not the responsibility to organization to satisfy you. Organization can
help you live a good lifestyle based on your capabilities and performance but they can do
nothing to satisfy your greed.
There seems to be this chicken and egg type of situation. Employees say, “Give us chance. Give us
role and compensation and we will prove our abilities”. While the stand of organizations is, “Develop
your skills and competencies. Prove your capabilities.Deserve it before you claim it. We will give you
growth and development”. Bike cannot move forward while on stand. Similarly, you cannot move
forward, if you will not improve capabilities and competencies.
Over the period of time, one thing that has become very clear that relationship development and
wealth creation are two different things. Within relationships, there is a wide gap between personal
(emotional) and professional relationships. One must understand, respect and appreciate difference
between the two. No one does any business to develop personal relations with employees.
Compensation is nothing more than sequence of numbers and irrespective of what you get you will
never be satisfied. On the other hand, performance can be described as continuous improvement
towards excellence and hence, no matter what you do there will always be scope for improvement. I
am not sure who will win the war of performance versus compensation but I have made an attempt
to make conceptual clarification. Self-awareness and communication are two tools that can help
bridge this gap.
Composed By: Sanjeev Himachali
Email ID - Sanjeev.firstname.lastname@example.org
Twitter - @Sanjuhimachali