How people set their Salary Expectations ?

(Image Source: Wikimedia)

How do people set their Salary expectations?

Particularly the one who are returning to job-market after a break, returning from other country or switching careers.

For instance when I returned from Japan, and was looking forward to my career shift, I asked. Many were tight-lipped. Even friends won’t share the details. And you will find them very diplomatic like “it depends”.

So when one more colleague is planning to return from Japan and mentioned he is expecting a salary of 20 Laks per annum as Project Manager in  IT firm.

I just explored casually (not some serious research though) …

One friend, who is senior architect in one of the leading software firm, & based in Pune mentioned a thumb rule at his work-place. 

We normally stick with 1.5 times experience. If he has 10 years of experience, reasonable expectation is 14 to 15 Laks per annum. And further this is moderated by skill-set, technology, certifications, kind of organizations, projects that one worked with and need of resource at that point of time.

Just couple of days back, I was talking to another friend. She was with consulting firm, and then resigned for some continuing education (not really increasing her marketability in corporate world). She mentioned that she is expecting a salary of 18 Laks per annum. I was little surprised and asked source of this figure.  Her argument...

Typically MBA receives the average salary around 7 Laks per annum. She has around 14 years of post-MBA experience.  So she added one Laks per year of experience and discounted for the two years of break.

Both the responses forced me to think.

Though there are salary surveys, ( here too ), user-forums, and reports on compensation trends, they don't really answer such special cases. 

More-over, these answers clearly underlined the entitlement philosophy of compensation, so for every year worked ,pay-raises are kind of expected.

Any thoughts or comments ? 

Image Source: http://en.wikipedia.org/wiki/File:Smartcard2.png 

Best Place to work !

This fourth toast-master project is my most memorable one.

First I had already committed the date . Before due date, even after toiling with two three ideas , I was not ready with the speech. Then I decided to take a short-cut. I used my Organization Behavior assignment of book review Maverick. I reviewed "Maverick" - a story of turn around of Brazilian business. I rewritten my assignment to suit 6 minutes speech. At that time I followed all project-4 requirements. I could finalize the draft after 4 to 5 revisions in the Starbucks.

Now only one day was left for rehearsal. So I practiced from early morning, while having breakfast , along with commuting, & during lunch hour . Finally I practiced it mentally while going to venue in train, and I delivered my speech. In spite of Anxiety , delivery was confident, smooth and free flowing. Practice helps !. I could feel the "Positive feedback". Later evaluator also gave good feedback.

Surprisingly speech won the best prepared speech award for that day. For me it become memorable as comparatively with less preparation , it gave more rewarding results.

Here is the draft of speech.

Best Place to work!

Fellow toastmaster , which day you like more - Friday or Monday ?
If you are cheerful , happy , and excited on Monday morning ,than Friday evening - then you belong to the better work place.

And How is this workplace - all employees reach at dot 0900 , all wears starched ,spotless suits and shiny shoes. Your idea will change - Mine also got changed after reading this book Maverick . Purpose of this speech is to introduce you to this book and firm called SEMCO - S-E-M-C-O . The book is all about the change - Change for better workplace .

Change made by people ,for people and by people.

First is flexibility . Flexibility in everything . Flexibility in arriving , leaving , holidays , dress - literary about everything. For example - look at our Monday morning routine. We rush , run to catch subway . It is peak hour ,as usual crowded . People ,People ,every where people. I use Tozai-sen , So much crowded ,that there is special subway staff to push people and close doors. I always feel like overblown balloon, someday it is going to burst open !.

How great it will be if we can avoid this time and reach office - may be just 15 min. late ,for some 30 min late ?

Crowed is not the only thing - You may wish to spend morning for a dear one - with simmering ,steamy hot coffee , or you may wish to hold the soft , smooth hand of your two year innocent child and walk for Hoiku-en.

This is possible - only with one single ,easy and simple step. You should have flexibility in office time. Semco does that . All employees -not only white collar staff ,but blue collar workers too - can come to office as per their convenience.

Company does not bother as long as work is done. But this single ,simple and easy step balances their work-life beautifully. Semco is flexible not only in arrival time ,but also in everything . You can decide your parking space , color of your office, color of factory , your furniture. You can
decide job-rotations , holidays & training. The height of flexibility is employees can decide their salaries too. Yes - Salaries too.

Another thing is your manager , your boss. Unavoidable evil. isn't it ?
(Pause ! )

Many feel that boss is like a devil - who stands between you & your evaluation , You & your promotion too. He is the one who drives you and your ( low voice ) increments and bonus .

What if we can reverse this ? So instead manager rates you , you rate your manager. Semco does exactly that !. Instead boss hire employees , employee interviews and hires boss. Employee
decide - if their manager need to be promoted or not.

Do you think this all is odd, weird and strange . But this book with 36 chapters and 300 pages is full of such odd things.

Like ....
No Organization Chart , Semco doesnʼt need one.
No pyramidal or hierarchical structures with CEO at top ,then VP , then middle managers and then staff. Semco does not have any hierarchies .
And no designations for employees . Obvisouly Semco donʼt need HR department too.
So no HR ,No secretarial staff.

Sounds odd ,but note that firm is a huge success by any standards and any measures .

What is the secret of this success ?
It is collective decision making. It is not a mere Nemawashi - or simply consensus making . It is genuine collective decision making , true participative & democratic decision making.

Employees are not distant , disconnected ,abstract , faceless number. They are part & parcel of this Semco. They are spirit & soul . They are the force behind Semco Success.

Toastmasters now if you want to read this book ,my purpose is served .

Thank you very much.

Indian Bureacracy - HR perspective .

Today I read the news about worst south Asian bureaucracy - India.

Those who area aware of Indian bureaucracy should know that majority of them come through the most grueling and difficult selection process of UPSC. Many bright and brilliant student spend years studying as this brings prestige ,salary ,power and unparalleled benefits. Many view it as kind of dream service with life-time employment and almost negligible performance accountability.

Moreover constitution of India protects these bureaucrats from fear of persecution ( mainly from politicians ) and financial insecurity. ( Details here. )

Prima facie bright employees and excellent career opportunities should result into high performing change agents , but Indian case is proving it wrong.

One of major reason may be the environment in which they work ,reminding me of article titiled " why good people do bad things ? " making a case for impact of system on individual behavior.

Though it is true that system in which these people work is practically difficult to change - but from HR perspective how about providing means ,practices and expert advice about how to cope with this system and remain efficient and high performing individuals ?

Any thoughts ?

Japanese adopting western Bonus culture !

Financial times dated 1-jun says "Nomura's 1600 staff- more than 50% of its investment arm adopted western style contracts" .

This will cut basic salaries , provide higher performance bonus and it will be easier to fire them in case of downturn.

Though the firm maintains that it is essential for integrating Japan and European acquisitions of Lehman , still it is in stark contrast with Japanese employer outlook of "stable Jobs" as well as against the government and regulators efforts all over world to curb executive compensation and golden parachutes.

So is Japanese embracing western culture in pay-packages ? It is difficult to comment with one such example.

More-over news article no where comments about employee reaction .One may doubt about the negotiating power with employees given recessionary trend and downturn in job-market .

Lets keep watching how other Japanese firm are responding ...

Obesity - Metabolic Syndrome and HR

Obesity ! What HR has to do with it . looks like a natural Question.

But in the Country like Japan , where salary-man spends most of his time in office - is closely linked , at least Authorities think so. So For employees ( And there dependents too ) measuring the waist-line is mandatory. This is an attempt to promote more healthy living as well as to keep tab on rising health care costs.

All employees above 40 will take this test. The number is estimated above 56 Million employees . Health ministry says 13 million suffer from Metabolic syndrome and further 14 million are at risk.

Tab is - firm has to cut number of overweight worker by 10% by 2012 , else they will face surcharge for elderly health care costs.

Personally most will support initiative , (And recent research like one in this link on BBC also underlines impact of waist-line on health. ). But it will be interesting to see how firms will respond to these regulations in coming days.

Severance Pay ,

Severance pay is paid for terminating employment .
This can be layoff , job elimination ,restructuring or mutual agreement. If employee agreement do not stipulate any serverance pay , there is no obligation on employer to pay.

But normally employer get rid of any future claims, litigation through signed release along-with Severance Pay.

Severance pay is a positive and good thing from employer ,when job is lost through uncontrolled external circumstances. ( For example current financial turmoil ).

Japan still have the mind-set of life-time employment (Though changing) and hence in most of cases employer pays for loss of employment.In general holiday and other monetary benefits ( other than Bonus ) are also compensated.

Normally bonus is paid - if you are working till the pay-date. Off-course if retrenchment happened unfairly just before bonus , you can complain to labor office. And in good circumstances labor office may negotiate this to fair-portion.

Japanese firms like to keep low profile in such circumstances and in general for employees with two years with firm 3 months of salary plus unused holidays are paid. For more experienced employees up to 5 months plus unused holidays is the norm.

Senior employees and Managers need to negotiate . In a recent financial melt-down there are examples of 18 to 24 months of severance pays tied with signed release.

So there is surely more to watch while leaving too.

Happiness at Work

Ravindra Prasad has written an article on employee happiness on rediff.
In my opinion "Plan your week on Sunday night or Monday morning" is the most important in this list. It is surely more than mundane "to do list".

Those who are aware of Coveys most popular work "7 habits of highly effective people", will recognize that weekly planning is much more than effective time management.

Week is the basic planning block for realizing your long term goals which stems from personal mission statement. A motivating mission statement ,is the one which runs as a central thread in all decision making and planning. Preparing smart goals that reflect mission statement is the first step in good and effective time management. Now breaking down these goals in small chunks of weekly target is just a matter of working with details.

Personal mission statement and weekly planning complements each-other and sure way to lead purpose driven and satisfying life. This is applicable to personal as well as work-life.
No doubt that "7 Habits" has become a one of the most important work of our lives.

In my humble opinion introducing 7 habits at work-place in teams and with individuals is one concrete step towards happy employees.

Bankruptcy and Employee Benefits

There was unimaginable fall-out in financial markets recently . Japan too was not different.
Bear sterns, J.P. Morgan ,Merry Lynch , Citi-group and biggest of all Lehman !.

Example of Lehman was very classic ,while employees were down with week-end hang-over they woke up with the bankruptcy news. Initially there was a ambiguity about whats gonna happen ,to the extent that whether even current months salary would be paid ?

After little exploring it shows what happens to employees in such circumstances -

• Firm files bankruptcy in court.
• Court monitors , dispose of assets and use incoming cash to pay off creditors.
• Taxes comes first
• Then employee claims are paid.
  
• Lastly outside creditors are taken care off.

So as long as firm is solvent and have enough assets , employee will be paid surely for the billable hours.

Normally pension is safe ( In case of Japan at-least ) but for health insurance you need to refer to your agreements.

I extracted this information from here ,here and here

Salary and Confidentiality

As long as there is some-one in your friend-circle earning more than you , you are bound to be unhappy. Firm don't want you to be unhappy and hence forbid you to discuss about compensation.

Humor apart , but back in India I found that this is common topic around water-cooler among friends. I was never aware of the sensitivity of the topic till last week.

But in Japan and in Financial industry environment , it is very sensitive topic. Two employees are fired recently in firm X for openly discussing about Bonus issues and others are reminded that this is confidential matter.

I was surprised and turn to Google to satisfy curiosity.

• In one of the surveys 51% mentioned that there is no policy regarding pay-confidentiality.
• Surprisingly in some of places ,it is illegal to forbid employees , and they can share information about wages.
• I personally feel that this is little gray area , as packages of top management are published and considered a good governance practice. Further salaries are openly discussed with recruiters and with tax-consultants.
  
• Simple web-search or even casual talk with other HR-executives shows that there is no clarity about this topic and no concrete answers available. I would like to hear some views on this. Any pointers to legal articles will be highly appreciated