Compensation Versus Performance Who will win this battle- A Blog By Sanjeev Himachali

1
Compensation Versus Performance Who will win this
battle
Once there was a concept of life-time job. People
used to join one organization and would work
there for rest of their life. They would grow
with company. Loyalty and relation were given
more preference than anything else. Performance,
compensation, and growth were important but not
as important as emotions and brotherhood.
However, now things have changed. More so in last
THREE decades. There seems to be a tussle, a
kind of tug of war, between performance and
compensation. Loyalty, emotions and relations
appear like things of ancient time. For an
employee, an employer is as good as his last
increment while for an employer, an employee is
as good as his performance in last quarter. Both
can replace one another at any time and as many
times during their life. Who is going to win this
war? Will there be any winner? It is difficult
to say.
2

• Employees dont want to link their compensation
  and growth with their performance. Every year
  they expect certain percentage of increment.
  They must get promotion every couple of years.
  And this should not be linked to their
  performance. They have irrational comparisons of
  their compensation. They compare their salaries
  with their colleagues across functions and with
  their peers across industries. They are not
  willing to buy concepts of educational
  backgrounds, relevant experiences and size or
  revenue of organization.
• Read More about Compensation Versus Performance.
• Following factors can influence your compensation
  in an organization
• Relevant experience Your total experience is
  irrelevant. What matters the most is your
  relevant experience in given role and industry
  type.
• Education qualification and Grading of
  College/Institute It matters a lot. There is
  basic qualification requirement for each role.
  Grading of college or institute implies the
  quality of training, grooming and knowledge you
  might have received and hence plays an important
  role. Same holds true for mode of education
  full-time or distance learning.
• Organization Type and Revenue of Organization A
  start-up, matured and multi-national
  organization will follow different compensation
  structures. Revenue of company also plays an
  important role. One cannot compare compensation
  of one role in a 10 million USD company with a
  100 million USD company. That is
  insanecomparison.
• Internal Equity There cannot be any comparison
  between same job titles in two different
  functions. For example, internal equity calls for
  same salary range for two sales managers in
• same city. However, one cannot compare salaries
  of Sales Manager with Production Manager.
• On other hand, employers dont want to talk about
  compensation and benefits in isolation. Growth
  and compensation must be linked with job
  responsibilities and accountabilities. Loyalty
  alone is not sufficient. Organizations require
  loyalty with consistent track of performance to
  help you grow. You cannot move to next level
  just because you have spent certain numbers of
  years in one position or role. In schools and
  colleges, getting 60 marks is considered as
  first class and getting above 75 is
  distinction. However, this is not true in
  corporate world. You must score at least 75 in
  your annual assessment to be considered for any
  increment. You must consistently score above 90
  in your annual assessment for at least THREE
  years to be considered for promotion to next
  level in hierarchy.
• Irrespective of your score in annual assessment,
  as a standard industry practice, you shall be
  classified as High Performer, Average Performer
  and Low Performer in the ratio of 206020, which
  eventually
• implies Must Retain, Try to Retain and Let Go.
• Following factors can influence your growth in an
  organization
• 1. Career Planning and Competency Development
  Employees are responsible for their own career
  planning as well as developing necessary skills
  and competencies required to move up the
  hierarchy. You know what you want in your life.
  You know what are your strengths,

3

• weaknesses and constraints. It is not the
  responsibility of an organization to plan or
  develop your career. Organization does arrange
  for development programs for employees, however,
  those programs are planned as per growth
  aspirations of the organization.
• Job Descriptions and Skill requirement
  Organizations shall prepare job descriptions and
  skill and requirements for each role. These
  shall be made available to employees for them to
  know where they stand in the organization and
  what they need to do to move up in the hierarchy.
• Assessment Centre There is a need to have
  assessment centres in organizations to assess
  readiness and competencies of employees required
  to move to next level in hierarchy. Nothing can
  be more painful than losing an employee to the
  market who was ready but not identified.
• What are you looking for? Employees shall be
  very clear about what they want. They must not
  look for right things at right places. Start-up
  companies provide an opportunity to create
• something large from scratch while matured MNCs
  gives an opportunity to expand your horizons. In
  start-ups, financials are big constraints while
  in matured MNCs, bureaucracy can be a hurdle
  for your vertical growth. Final choice is yours.
• Risk taking abilities Relocation can be a big
  hurdle in your career growth. Organizations might
  give you the kind of growth that you need but
  you can squander that opportunity, if you are not
  willing to relocate. You must be willing to take
  risks.
• Job Satisfaction It is the responsibility of
  organization to give you clear job description,
  tool to perform your job efficiently and set
  non-discriminatory performance management system,
  however, it is not the responsibility to
  organization to satisfy you. Organization can
  help you live a good lifestyle based on your
  capabilities and performance but they can do
  nothing to satisfy your greed.
• There seems to be this chicken and egg type of
  situation. Employees say, Give us chance. Give
  us role and compensation and we will prove our
  abilities. While the stand of organizations is,
  Develop your skills and competencies. Prove
  your capabilities.Deserve it before you claim it.
  We will give you growth and development. Bike
  cannot move forward while on stand. Similarly,
  you cannot move forward, if you will not improve
  capabilities and competencies.
• Over the period of time, one thing that has
  become very clear that relationship development
  and wealth creation are two different things.
  Within relationships, there is a wide gap between
  personal (emotional) and professional
  relationships. One must understand, respect and
  appreciate difference between the two. No one
  does any business to develop personal relations
  with employees.
• Compensation is nothing more than sequence of
  numbers and irrespective of what you get you will
  never be satisfied. On the other hand,
  performance can be described as continuous
  improvement towards excellence and hence, no
  matter what you do there will always be scope for
  improvement. I am not sure who will win the war
  of performance versus compensation but I have
  made an attempt to
• make conceptual clarification. Self-awareness and
  communication are two tools that can help bridge
  this gap.
• About Us

4
With multiple successes achieved through driving
commercially embedded HR strategy and programs
across Africa, Europe, the Middle East, USA, and
Hong Kong, Sanjeev Himachali, Talent Strategist
Management Consultant exhibits over a decade and
a half years of progressive, leadership
experience and core competencies in talent
acquisition, management, and development, HR
program management, compensation benefits
management, and staff engagements. In January
2015 he launched Ecliptic HR Solutions to
provide strategic human resource and talent
management consulting across BFSI,
Manufacturing, Automobile, IT ITES, Telecom,
Retail, and FMCG sectors. As a Talent Strategist,
Sanjeev partners with organizations hiring
managers to find, select, and hire top talent
which exemplifies firms values and provides a
foundation for organizations future
growth. Sanjeev is adept at expediting change
management through leadership, differentiated
talent models, attracting and developing the
best talent, and building a culture of
engagement, agility, and innovation. He has
proved to be a trusted advisor to organizational
leadership in initiating human capital
management strategies and aligning HR best
practices and processes with organizational
objectives. As a Management Consultant, Sanjeev
is credited with pioneering best practice HR
systems and processes for clients that brought a
new era of employer brand visibility and saw the
companys HR systems heralded among the industry
best. Sanjeev has championed psychometric
assessment DISC and Thomas Profiling, and
developed Managerial Competency Framework for
clients, while simultaneously deploying
succession planning strategies for high profile
roles in organizations. He is highly experienced
in the organizational diagnosis and the design
and facilitation of events and staff development
activities including executive coaching. Sanjeev
has earned his MBA in HR and is certified in
MBTI, PPA Extended DISC Practice, and Green
Belt Lean Six Sigma. Contact Us Sanjeev
Himachali Address No 22, C2, 6th Floor,Hermes
Heritage II,Shastri Nagar, Yerwada,Pune -
411006 Contact No 9975689991 8149007976 Email
sanjeev.himachali_at_ecliptichr.com Website
http//www.sanjeevhimachali.org