Skip to main content

Peter out: Too expensive for the role

I have always been concerned about the rising cost of employees and more so when I see the roles not changing, talent just good enough for the basic role and salary gone up by 70% to 100% over last 3 appraisals. This is peter mark, I call. This is a threshold beyond which company starts losing out big way.

Has the role changed for higher levels of responsibilities over a period of time? If not why pay more. Simple economics says, pay for what you get. I guess, organisations must start calculating the losses, the holy loss as I prefer to call it, on each employee after 2 years and must ensure that, cost is within the peter level or else follow the McKinsey's "Go up or out".
If you do not follow this, you frustrate the employee if he is ambitious to grow or you keep paying higher salary for someone who does not grow. Either which way, action is required. We all talk about employee life cycle, but have we ever thought beyond the admin part of employee management? There is an optimal value of the employee that has to be leveraged to get the best out of employee's talent and cost within the defined timeline of  1 to 3 years and see, how many have been optimized and where to position the best one's and what to do with the laggards.
I have see the admin, payroll, finance, HR and many other places employees being there for past 6 to 10 years without change in role or skills, or qualifications and become untenable for the cost they charge now due to their levels.
Worst I have seen is when companies have promoted the laggards to position of prominence due to absence of better ones and they deliberately have not hired a smart guy as that will be a challenge to the manager, who chooses to hire and keep only the below average folks in his team for ease of management and keep his position important and unchallenged. He deliberately does not mentor or empower his subordinates and allows them to commit mistakes so that he can rule over them.
Companies need to have a watch on such managers who build termites into the system and kill company's image, reputation an prestige and deliver poor services to employees and customers. 


Popular posts from this blog

What is The Hay Group Total Reward Framework

The Hay Group Total Reward Framework A new way of understanding reward Reward strategies must be anchored in business reality to be effective. Which means linking it to your business strategy – and the needs of your employees as well as your organisation. Our Total Reward Framework helps you optimise reward, no matter how challenging the conditions. The issue Remuneration tends to be one of the worst-managed parts of an organisation’s cost structure. But with 10-70 per cent of total costs wrapped up in it, reward cannot be ignored, particularly in a downturn. To be effective, reward programmes must reflect the needs of the business, now and in the future. Only if they are tied closely to company strategy, business performance and the needs of employees can reward programmes deliver the ROI that is needed in tough times[MK1] . The Hay Group Total Reward Framework takes strategy as a starting point – and it focuses on total reward: every financial measure together with no

Aon Hewitt Total Rewards Framework

Aon Hewitt Total Rewards Framework The Aon Hewitt model and approach believes in considering Total Rewards as a business tool and very much linked to overall business objectives! Reward as understood is a very complex mechanism and some efforts of correcting the base pay and titling in a hurry by many MNCs in India have done a bigger crime by trying to correct it by market adjustments without looking at the talent map, complexity and expectations out of role and mapping it against the benchmark. Titles in India are a big misnomer and hardly any survey on compensation ever probes and captures and calibrates the tangible outcome based bench marking! If we dive deep, we will find that the key factors of Education, Experience and Quality of Education, Quality and relevance of experience and education are not calculated granular! A diploma holder technical manager gets the salary benchmarked for the top T-school manager with top quality experience in a challenging and break-through

Well-known interviewing technique “laddering,” the Means-End Chain!

Courtesy HBR article...  The 30 Elements of Consumer Value: A Hierarchy ( Understanding Consumer Decision-Making with Means-End Research - Rockbridge ( Many of the studies involved the well-known interviewing technique “laddering,” which probes consumers’ initial stated preferences to identify what’s driving them In our research we don’t accept on its face a consumer’s statement that a certain product attribute is important; instead we explore what underlies that statement. For example, when someone says her bank is “convenient,” its value derives from some combination of the functional elements  saves time,   avoids hassle,   simplifies,  and  reduces effort.   We have identified 30 “elements of value”—fundamental attributes in their most essential and discrete forms.  These elements fall into four categories: functional, emotional, life changing, and social impact. Our model traces its conceptual roots to the psychologist Abraham Maslow’s “hierarchy of needs,