1. First Fix the Internal Compensation
  2. Then make it externally competitive

(In the current scenario at times this may have to be interchanged)

If we increase salaries across organization arbitrarily, would we be able to reduce our attrition?

  • Can we build a robust team at minimal cost?
  • How should our salary structure be to attract the best talent in the market?
  • What is more important – Internal Pay Parity or external competitiveness?

INDIA, a job market driven by knowledge workers, fluctuating pay scales & high attrition, HR managers need to find these answers on an ongoing basis.

Developing/Revising a salary structure for an organization is extremely difficult & time consuming. The most complex is to find a compromise between ‘Internal Parity’ (paying people in proportion to the relative value of their job) & ‘External Competitiveness’ (paying people in proportion to the market price for the job), & at the same time ensure that the Salary is a source of motivating the individual employee.

Some points that may help:

  • Job Evaluation – Descriptions & profile to avoid ambiguity of expectations
  • Market Price – look at benchmarking similar jobs in the market across different industries.

More points & thoughts are welcome!


Written by AD
ex waiter, angadia, travel agent, dotcomer, dukaandaar, marketeer, people watcher. appreciates single malt, food, friends