Hi, I work in a small IT firm consisting of 4 employees, because of the limitation of small structure I work in multi profiles as branch head, HR, admin, etc. I would like to seek expert advice on the following situation that we face :
Junior pay scale employee- X, joined the firm 6 months back. At the time of joining he demanded for 1.8L ctc which he was not eligible, with his quality profile. Company offered 1.56L Ctc and assured that his salary will be revised to 1.8 L after the completion of 6 months probation that too with this performance levels.Now 6 months are over, his performance was just upto satisfactory level and agreed salary revision is about to take place.
Now X have come up with other company offer letter and bargaining for more salary hike by saying personal financial reasons. The offer letter shows 2.8 L, which is 80% hike from current ctc.
X is an average employee, since the team size is small company has to think more on Resignation or Hike.
How can I tackle the situation?
- Should we negotiate with further hikes?
- Day before this X have seen his colleague's(friend) payslip, which would have resulted in this bargain?
- We don't have bound in company(Thinking to implement)
- If we accept his resignation- Should I mention about this scenario during his background verification process to other company HR/consultant?
Eagerly waiting to hear from experts.
Regards,
Dazz
From India, Mumbai
4Junior pay scale employee- X, joined the firm 6 months back. At the time of joining he demanded for 1.8L ctc which he was not eligible, with his quality profile. Company offered 1.56L Ctc and assured that his salary will be revised to 1.8 L after the completion of 6 months probation that too with this performance levels.Now 6 months are over, his performance was just upto satisfactory level and agreed salary revision is about to take place.
Now X have come up with other company offer letter and bargaining for more salary hike by saying personal financial reasons. The offer letter shows 2.8 L, which is 80% hike from current ctc.
X is an average employee, since the team size is small company has to think more on Resignation or Hike.
How can I tackle the situation?
- Should we negotiate with further hikes?
- Day before this X have seen his colleague's(friend) payslip, which would have resulted in this bargain?
- We don't have bound in company(Thinking to implement)
- If we accept his resignation- Should I mention about this scenario during his background verification process to other company HR/consultant?
Eagerly waiting to hear from experts.
Regards,
Dazz
From India, Mumbai
Dear Dazz,
After six months, you are not satisfied with the performance of the employee. You are not inclined to give salary hike. Yet if he comes up with Offer Letter with salary of 2.8L then better let him go. Let him avail of his career opportunity. For you it would be good riddance!
If you relax your standards and negotiate with him, he could develop habit of bargaining. What if he comes up with yet another offer letter with still higher salary after one year? Will you raise salary once again to retain him?
Now if you raise his salary to retain him, it could send wrong message to other employees. What if they also start bargaining? Forever, you could be on bargaining/negotiating mode!
By the way, did you verify the authenticity of the Offer Letter? Is it genuine or concocted one? If latter, then possibly he may come up with his request to withdraw the letter of resignation. At that time, to retain him make a separate agreement, retain his education certificates. Let him sign the bond for two years.
Thanks,
Dinesh Divekar
From India, Bangalore
After six months, you are not satisfied with the performance of the employee. You are not inclined to give salary hike. Yet if he comes up with Offer Letter with salary of 2.8L then better let him go. Let him avail of his career opportunity. For you it would be good riddance!
If you relax your standards and negotiate with him, he could develop habit of bargaining. What if he comes up with yet another offer letter with still higher salary after one year? Will you raise salary once again to retain him?
Now if you raise his salary to retain him, it could send wrong message to other employees. What if they also start bargaining? Forever, you could be on bargaining/negotiating mode!
By the way, did you verify the authenticity of the Offer Letter? Is it genuine or concocted one? If latter, then possibly he may come up with his request to withdraw the letter of resignation. At that time, to retain him make a separate agreement, retain his education certificates. Let him sign the bond for two years.
Thanks,
Dinesh Divekar
From India, Bangalore
Let the gentleman go.
After all his work is barely OK and when employees start this kind of bargaining,it will create bad precedent if other employees start copying him.
Have a reasonably clear pay scale structure and employ as per that.
I would not speak negatively about him to new employer in case of enquiry/verification.I would give a neutral review of his work.
Once he is out of my firm I would like to harm his growth.
From India, Pune
After all his work is barely OK and when employees start this kind of bargaining,it will create bad precedent if other employees start copying him.
Have a reasonably clear pay scale structure and employ as per that.
I would not speak negatively about him to new employer in case of enquiry/verification.I would give a neutral review of his work.
Once he is out of my firm I would like to harm his growth.
From India, Pune
"Once he is out of my firm I would like to harm his growth' CORRECTION: Once he is out of my firm I would NOT (R) NOT like harm his growth. Error regretted
From India, Pune
From India, Pune
hiiiii
i have some suggestion if your company not willing to provide the hike kindly avoid because if he ask another hike again with another offer letter will you provide again and also if its create a culture all other staffs followed the same what you will do... always think the staffs should depend on the company. company do not depend the staffs..........
From India, Bangalore
i have some suggestion if your company not willing to provide the hike kindly avoid because if he ask another hike again with another offer letter will you provide again and also if its create a culture all other staffs followed the same what you will do... always think the staffs should depend on the company. company do not depend the staffs..........
From India, Bangalore
Unless the skills are extraordinary and replacement is extremely difficult , one should not try to retain such employee who is bargaining through offer letter from another employer.
This can trap you in a vicious cycle and will give wrong impression to all employees.
From India, Mumbai
This can trap you in a vicious cycle and will give wrong impression to all employees.
From India, Mumbai
Hi Dazz,
Please check if, For an IT firm, annual package of 1.8L is good enough as per "market rates". As far as I know, the IT sector has always give more salaries than other office/engineering staff positions.
If Mr. X has seen his colleague's salary slip & there is identifiable difference, then it is obvious that he aspires for the same.
If you let the person go, there will be also unrest in other employees to seek for better opportunities.
This is the main reason the retention policies try to average out salaries with current market scenarios.
If the person is getting 80% hike & you are not able to give it, then I do not think the person will stay anyway. Keep negotiations to minimum. Just give your offer & ask him to decide.
If he decided to leave, wish him 'best of luck'.
Mr. X’s new employer should already know his current salary. So, your factual & frank response to the verification check should ideally not harm his prospects in new job. Just try to remain unbiased & stick to facts.
Bonds are most effective, but never a very 'ethical' way of retention. Also, retaining his education certificates (Actually any government issued documents) is illegal.
Do a review of why other 3 employees are still staying with you? This will give you good pointers on, which kind of replacement you want to recruit in place of Mr. X ahead, who will not leave the job soon.
There are generally many opportunities in IT industry around. Employees will change the jobs for sure...
As a small firm, you should focus on hiring experienced & 'settled' candidates, rather than ambitious young people (even at a little higher cost). You can focus on good work environment & steady assured growth to retain these employees rather than running in the rat race of hike negotiations & bonded employment.
Best Regards,
Amod Bobade.
Please check if, For an IT firm, annual package of 1.8L is good enough as per "market rates". As far as I know, the IT sector has always give more salaries than other office/engineering staff positions.
If Mr. X has seen his colleague's salary slip & there is identifiable difference, then it is obvious that he aspires for the same.
If you let the person go, there will be also unrest in other employees to seek for better opportunities.
This is the main reason the retention policies try to average out salaries with current market scenarios.
If the person is getting 80% hike & you are not able to give it, then I do not think the person will stay anyway. Keep negotiations to minimum. Just give your offer & ask him to decide.
If he decided to leave, wish him 'best of luck'.
Mr. X’s new employer should already know his current salary. So, your factual & frank response to the verification check should ideally not harm his prospects in new job. Just try to remain unbiased & stick to facts.
Bonds are most effective, but never a very 'ethical' way of retention. Also, retaining his education certificates (Actually any government issued documents) is illegal.
Do a review of why other 3 employees are still staying with you? This will give you good pointers on, which kind of replacement you want to recruit in place of Mr. X ahead, who will not leave the job soon.
There are generally many opportunities in IT industry around. Employees will change the jobs for sure...
As a small firm, you should focus on hiring experienced & 'settled' candidates, rather than ambitious young people (even at a little higher cost). You can focus on good work environment & steady assured growth to retain these employees rather than running in the rat race of hike negotiations & bonded employment.
Best Regards,
Amod Bobade.
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