Sunday, October 19, 2008

A Fair Pay

HR in the present scenario acts as that indispensable pillar without the support of which an organization cannot even dream to touch the zenith of success. But this was not the case several years ago when HR was nothing more than a” personnel “department in the early 1900s. Then HR ‘s role was restricted to hiring and firing, supervision of the payroll department and administration of the benefit plans. As technology stepped into the scene, it inflated the role of HR. Then HR began to play an expanded role in employee selection, training and development. These are the days strategic HR. However the crux role of HR hasn’t change much. Recruitment and administration of compensation of employees still enjoys the pivotal focus of its attention.
Over the years Human resource as a subject has evolved in the light of many fads including the numerous ways of employee selection, the diverse ways of training and development of human potential, the methods of performance appraisal etc. The present Hr scenario has been taken up in a cyclone of ideas related to the ways of compensating the existing human potential within an organization. Performance based compensation package has been the latest trend of most of the organizations. They say that this type of compensation is all about using it more actively to motivate the employees. In today’s scenario organizations are not much interested in acquiring physical resources but what occupies their concern is whether those resources have been utilized to the ultimate by their existing human potential. This cannot be denied that these streams of thoughts have boosted the HR ‘s arena of action. But HR ‘s principal to respect the intrinsic value of humans are being is overshadowed. For e.g. a person working in a company for above 10 years has given a good performance over the years. But suddenly his performance dips due to some problems faced by him in his personal front. The company fails to understand his point of view and hands him remuneration, which is exactly equivalent to his present performance. Where does he find the answers to his questions? What is the value of his loyalty of all these years to this company? Is he nothing more than a machine whose input is exactly proportional to it’s input?
Now let me add to your confusion. If performance based compensation package is the most desirable and motivating phenomenon then why is it so that TCS has been given the title of the best employer. And the title givers are none other than the employees. TCS has a compensation structure which has only 5 % of it’s remuneration based on performance. Let me tell you TCS is such an organization, which makes their employees, work in teams and it is the total team, which they evaluate while deciding the remuneration, not the indivisual. This has a lot of benefits. First of all it does not encourage peer rivalry. Work teams are characterized by the presence of faith amongst the team members, co-ordination, interdependence, team spirit, trust, etc. These qualities cannot foster if each individual’s greed to stand out in the crowd overcomes his concern for the success of the team as a whole. That is the reason TCS has resorted to such a compensation structures. In at attempt to find out what is the reason for the company generating such a degree of work satisfaction amongst it’s employees it was revealed that TCS is popular not because of it’s compensation but it’s principal of proper harnessing the existing human potential with in an organization The idea is not to convince you that pay as per performance is not the correct way rewarding the employees. Because the above has again certain advantages. Paying as per performance means you are rewarding the person what he deserves. It means, those who does not give in that degree of extra effort is not a parasite eating on the company. And those who have the credibility get what is due for them.
The confusion that whether tailor pay to performance is acceptable no not does not end here. In a call center the sales people can be awarded as per their sales performance. But what about those who attend the incoming calls. What is the criterion to evaluate them, performance or the effort? The individual or the team? So it is not so simple to sail yourself in this growing fad. Before doing this the organizations must do a lot of homework of deciding the scales of measurement of performance, identifying the competencies on which their pay should be based. To decide which type of compensation is best to adopt the organization to make an in-depth of the job profile, it’s own area ob business. Just like a manger should be paid as per his competencies like team building, leadership qualities on the other hand a software developer should be awarded as per the hours of work he puts in, the skills he posses etc. The idea behind designing all pay packages should be paying as per ones performance, skills and competencies as well as motivating them to improve in the near future



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