Old employees of the organization feel that their salary is lower than the new employees who are joining. Is there a way that the salary of the old employees may be aligned with the salary of new employees.
From India
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From India
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Yes! Of course!
Organizations are not doing right if they hire new employees at new rates while leaving their old employees to languish at their old rates.
It is the primary responsibility of HR to ensure that the four (4) compensation principles are at work in their organization. If these principles are not being followed, then HR has failed in its job.
The four compensation principles that I am referring to are as follows:
1. Internal Equity
2. External Competitiveness
3. Affordability
4. Sustainability
When the first principle (internal equity) is observed by an organization, old employees should not have an issue because any adjustments to the hiring rate of new employees would automatically protect them. This perspective assumes that old employees have been correctly evaluated and classified, and that the company utilizes an appropriate "salary grade" within an internationally accepted salary structure. Internationally recognized salary structures can easily adapt if there is a need to adjust hiring rates.
Challenges arise in countries where employees' salaries are negotiated individually during hiring, and where the components of rates are seen as the salary structure itself. In such cases, adjusting old salaries becomes complex as HR must consider various factors per employee. This may lead to subjectivity and bias in adjustment decisions, especially if there are no standards in place.
My company assists business organizations worldwide in transitioning their compensation and salary structures to international standards and processes. Please let me know if you require assistance and have a budget for an external consultant.
Best regards,
Ed Llarena, Jr.
From Philippines, Parañaque
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104Organizations are not doing right if they hire new employees at new rates while leaving their old employees to languish at their old rates.
It is the primary responsibility of HR to ensure that the four (4) compensation principles are at work in their organization. If these principles are not being followed, then HR has failed in its job.
The four compensation principles that I am referring to are as follows:
1. Internal Equity
2. External Competitiveness
3. Affordability
4. Sustainability
When the first principle (internal equity) is observed by an organization, old employees should not have an issue because any adjustments to the hiring rate of new employees would automatically protect them. This perspective assumes that old employees have been correctly evaluated and classified, and that the company utilizes an appropriate "salary grade" within an internationally accepted salary structure. Internationally recognized salary structures can easily adapt if there is a need to adjust hiring rates.
Challenges arise in countries where employees' salaries are negotiated individually during hiring, and where the components of rates are seen as the salary structure itself. In such cases, adjusting old salaries becomes complex as HR must consider various factors per employee. This may lead to subjectivity and bias in adjustment decisions, especially if there are no standards in place.
My company assists business organizations worldwide in transitioning their compensation and salary structures to international standards and processes. Please let me know if you require assistance and have a budget for an external consultant.
Best regards,
Ed Llarena, Jr.
From Philippines, Parañaque
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Salary-Note.doc
SALARY SHEET CALCULATION.xls