Increasingly, companies are opting for a higher variable pay. But many candidates feel uncomfortable with the variable pay plan. These people may not be the best ‘fit’ with the company because there is a philosophical disconnect. Candidates too will need to understand a different compensation philosophy and introspect their self-belief and risk appetite.
No two compensation structures, even in the same industry, are similar. Comparing apples with oranges, as one typically does, is not a useful exercise. It is important to appreciate the tax liabilities, including FBT implications. Inter-city differences impact the cost of living.
Likewise, it is important to understand what services are provided by the employing organisation, either free or at a discount. Some of these may be worth being tempted with, while others may not be relevant to one’s needs.
Perquisites, benefits and freebies are very individual-specific and this must be factored in while looking at the complete offer. Many statutory payouts like gratuity are not genuine differentiators. These are legal dues and come into play only after a specific tenure with a company.
While these elements run across levels, they become more critical at senior levels. Organisations typically have greater flexibility to make individual concessions at senior levels. The willingness to do so will depend, of course, not just on the perceived value of the individual but also how the compensation conversations pan out.
Prabir Jha is Sr Vice-President & Global Head-HR, Dr Reddy’s Labs
(These views are personal and may not represent the views of his company)