Hi Guys,
It's the appraisal time.
Attrition is very meager at our office. The seniors are becoming even more senior, but the designations are stagnated, so no additional responsibility/work can be allocated. However, the salaries are hiked during annual appraisals every year based on the revenue.
Now, the question is, despite strengthening the sales team in terms of manpower and salary, we could get very little work this year and couldn't even reach break even; it's in loss. And yes, appraisals again. I am very confused because I cannot terminate or lay off employees as they are emotionally attached to the company, have been working here for quite some time, and have been well trained during bench hours. However, I cannot hike their salaries according to market standards as the company is in loss.
How do you think this situation should be handled? It is not the employees' mistake as we have not provided them work; otherwise, they all were performing well when given work.
I request all the seniors to please come up with your solutions.
Thanking in anticipation.
Regards,
Sari
From India, Hyderabad
43It's the appraisal time.
Attrition is very meager at our office. The seniors are becoming even more senior, but the designations are stagnated, so no additional responsibility/work can be allocated. However, the salaries are hiked during annual appraisals every year based on the revenue.
Now, the question is, despite strengthening the sales team in terms of manpower and salary, we could get very little work this year and couldn't even reach break even; it's in loss. And yes, appraisals again. I am very confused because I cannot terminate or lay off employees as they are emotionally attached to the company, have been working here for quite some time, and have been well trained during bench hours. However, I cannot hike their salaries according to market standards as the company is in loss.
How do you think this situation should be handled? It is not the employees' mistake as we have not provided them work; otherwise, they all were performing well when given work.
I request all the seniors to please come up with your solutions.
Thanking in anticipation.
Regards,
Sari
From India, Hyderabad
Dear Sari,
Yes, this is a very critical situation and it's very hard to handle things. As you said, the employees are very loyal to the company and well-trained. The first thing you can do is to inform them about the situation - that the company is not able to reach break-even and we are facing some financial crisis. When these crises are over, the company will start performing again, and you will be appreciated for your work and loyalty to the company.
Note: Don't lay off employees. Also, don't make them impatient. Loyal and hardworking employees are assets to the company. Retention for the company doesn't mean that you want to save the money spent on them in the past. It's about their presence, loyalty... These are the things that are more important. This could be a challenge for...
Wish you the best of luck.
Regards,
HASSAN
Most of the employees better know whether they have a business or not.
From Pakistan, Islamabad
Yes, this is a very critical situation and it's very hard to handle things. As you said, the employees are very loyal to the company and well-trained. The first thing you can do is to inform them about the situation - that the company is not able to reach break-even and we are facing some financial crisis. When these crises are over, the company will start performing again, and you will be appreciated for your work and loyalty to the company.
Note: Don't lay off employees. Also, don't make them impatient. Loyal and hardworking employees are assets to the company. Retention for the company doesn't mean that you want to save the money spent on them in the past. It's about their presence, loyalty... These are the things that are more important. This could be a challenge for...
Wish you the best of luck.
Regards,
HASSAN
Most of the employees better know whether they have a business or not.
From Pakistan, Islamabad
Thank you, Hassan, for your prompt reply.
The worst part is employees are expecting a hike irrespective of being aware of the business situation of the company. After all, they have valid reasons - family, loans, etc. This is a human side of me.
But if I think only from HR's perspective, the employees have been here for quite some time, getting stagnated with no new creativity, new ventures, and the manpower being more than required. We end up paying salaries even when they are on the bench. I can hire freshers in the meantime with a meagre pay and train them until we get projects. In fact, I have seen new joiners performing better than seniors. The old employees have become accustomed to this company, taking it for granted at times, showing no discipline or proper etiquettes, and not being flexible for new policies and changes. On top of it, they don't let new joiners grow in the name of seniority. So, competent ones are not in the right chairs.
WHAT SAY?????
From India, Hyderabad
The worst part is employees are expecting a hike irrespective of being aware of the business situation of the company. After all, they have valid reasons - family, loans, etc. This is a human side of me.
But if I think only from HR's perspective, the employees have been here for quite some time, getting stagnated with no new creativity, new ventures, and the manpower being more than required. We end up paying salaries even when they are on the bench. I can hire freshers in the meantime with a meagre pay and train them until we get projects. In fact, I have seen new joiners performing better than seniors. The old employees have become accustomed to this company, taking it for granted at times, showing no discipline or proper etiquettes, and not being flexible for new policies and changes. On top of it, they don't let new joiners grow in the name of seniority. So, competent ones are not in the right chairs.
WHAT SAY?????
From India, Hyderabad
If this would be the case, then just go ahead. Blast an email stating that all employees are under strict observation, and the company needs to be restructured. The performance of all employees will be monitored.
Alternatively, you may initiate the necessary actions because there wouldn't be any compromise on discipline. Matters should not be taken lightly.
Regards,
HASSAN
From Pakistan, Islamabad
Alternatively, you may initiate the necessary actions because there wouldn't be any compromise on discipline. Matters should not be taken lightly.
Regards,
HASSAN
From Pakistan, Islamabad
Hi Sari,
My views...
If you are appraising sales guys, then you can take the targets and the highest target that has been achieved, then do a forced ranking as per the bell curve and analyze as to how many are your anchor guys, star performers and the bottom performers. Based on your ranking of the employees, select the bottom performers and let them go through a rigorous performance improvement plan.
Ultimately, I don't think you might want to retain the non-improvers despite these efforts. In their place, get some freshers, where your wage cost will reduce.
Gone are the days when HR was just a support function, now even we have the cost savings and earnings in our KRAs and will have to support our performance, especially when the company is in a challenging situation.
Thanks and Regards,
Siva
From India, Mumbai
My views...
If you are appraising sales guys, then you can take the targets and the highest target that has been achieved, then do a forced ranking as per the bell curve and analyze as to how many are your anchor guys, star performers and the bottom performers. Based on your ranking of the employees, select the bottom performers and let them go through a rigorous performance improvement plan.
Ultimately, I don't think you might want to retain the non-improvers despite these efforts. In their place, get some freshers, where your wage cost will reduce.
Gone are the days when HR was just a support function, now even we have the cost savings and earnings in our KRAs and will have to support our performance, especially when the company is in a challenging situation.
Thanks and Regards,
Siva
From India, Mumbai
Dear Sari,
You need to give some token hike. The way I see it is this -- you need to communicate to all employees when they are having their appraisal meeting that they will get a hike. If someone complains that they have a meager hike, the following reasons can be cited:
1. The company is not making as much profit as expected.
2. You are not performing to your optimum.
3. We've been noticing unacceptable behavior from many employees that we are going to deal with separately.
If the HR in your company is strong enough to voice its opinion, I think you should suggest that hard-working newcomers will have to get higher raises.
Ultimately, it is the law of the survivor. The seniors eventually have to move on to other roles in bigger companies, and the newer lot needs to breathe in fresh energy.
With this in mind, you should devise your strategy. Otherwise, your problems are not going to end. They may get compounded.
Don't send a mass mail telling your employees that the company is not doing well. It may lead to unexpected repercussions. Let the message be subtle yet firm. Eventually, the ones you deem redundant will move on. Meanwhile, you can train freshers to take newer and better responsibilities.
Regards,
SS
From India, Pune
You need to give some token hike. The way I see it is this -- you need to communicate to all employees when they are having their appraisal meeting that they will get a hike. If someone complains that they have a meager hike, the following reasons can be cited:
1. The company is not making as much profit as expected.
2. You are not performing to your optimum.
3. We've been noticing unacceptable behavior from many employees that we are going to deal with separately.
If the HR in your company is strong enough to voice its opinion, I think you should suggest that hard-working newcomers will have to get higher raises.
Ultimately, it is the law of the survivor. The seniors eventually have to move on to other roles in bigger companies, and the newer lot needs to breathe in fresh energy.
With this in mind, you should devise your strategy. Otherwise, your problems are not going to end. They may get compounded.
Don't send a mass mail telling your employees that the company is not doing well. It may lead to unexpected repercussions. Let the message be subtle yet firm. Eventually, the ones you deem redundant will move on. Meanwhile, you can train freshers to take newer and better responsibilities.
Regards,
SS
From India, Pune
Thank you, Siva, for your genuine inputs. The sales team is target-based, but most of the projects are on the verge. However, we may not hike their salaries until they achieve targets, and they are aware of it.
Coming to ranking the employees, the perception is changing with different people. As I am not a technical person, I am forced by the PMs to believe that a few are performing well and the rest are average. However, when I hear from the employees, they express feeling discriminated against and not allowed to grow.
Thank you, SS, it sounds good to sit with them and explain why there is a meager hike.
I am stuck with raising my opinion about hardworking new guys getting a better hike due to a lot of politics entangled with it. In the last two months, two new joiners left the organization as they were offered double the pay, and I couldn't stop them. I have made it clear to senior management many times, but they are taking very little action. Nowadays, I see PMs behaving rudely and absurdly with me. Being alone in HR, I find it really hard to deal with it.
From India, Hyderabad
Coming to ranking the employees, the perception is changing with different people. As I am not a technical person, I am forced by the PMs to believe that a few are performing well and the rest are average. However, when I hear from the employees, they express feeling discriminated against and not allowed to grow.
Thank you, SS, it sounds good to sit with them and explain why there is a meager hike.
I am stuck with raising my opinion about hardworking new guys getting a better hike due to a lot of politics entangled with it. In the last two months, two new joiners left the organization as they were offered double the pay, and I couldn't stop them. I have made it clear to senior management many times, but they are taking very little action. Nowadays, I see PMs behaving rudely and absurdly with me. Being alone in HR, I find it really hard to deal with it.
From India, Hyderabad
Hi Sari,
I can empathize with you. I have handled a similar situation a few years back. The same argument that they had been there with us was an emotional catch. The market is bad; we did not offer them enough jobs was another excuse.
1. We did not offer them enough jobs.
Let us compare with organizations who have done very well during this period. My only question was if others have done why did we not?
2. They had been with us for long.
Are you running a charitable institution or a business institution? This is what I asked. It took nearly a year, and the culture changed. Some even criticized that I am not a genuine HR person!
HR is not about taking care of all people. HR is about taking care of performers and enabling and converting non-performers as performers. But no organization can wait indefinitely for training non-performers. One of my friends used to say, "we are not a training organization," when I used to criticize him for his quick decisions on manpower. I did not agree with him then, and I was in HR then. I agreed with him the moment I became the head of Operations!
Well, that was my view.
Thanks,
Siva
From India, Chennai
I can empathize with you. I have handled a similar situation a few years back. The same argument that they had been there with us was an emotional catch. The market is bad; we did not offer them enough jobs was another excuse.
1. We did not offer them enough jobs.
Let us compare with organizations who have done very well during this period. My only question was if others have done why did we not?
2. They had been with us for long.
Are you running a charitable institution or a business institution? This is what I asked. It took nearly a year, and the culture changed. Some even criticized that I am not a genuine HR person!
HR is not about taking care of all people. HR is about taking care of performers and enabling and converting non-performers as performers. But no organization can wait indefinitely for training non-performers. One of my friends used to say, "we are not a training organization," when I used to criticize him for his quick decisions on manpower. I did not agree with him then, and I was in HR then. I agreed with him the moment I became the head of Operations!
Well, that was my view.
Thanks,
Siva
From India, Chennai
Thank you once again, Mr. Siva, for a very clear picture of taking things and motivating me. I am sure this is not faced only by me; there are many HR professionals who are struggling to make a change. The change may not be drastic as the root cause has much to do with the mindsets of the people and the culture that has been practiced, but yes, "WE WILL."
From India, Hyderabad
From India, Hyderabad
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