In a company , median salary is where half the number
of employees are getting more and the other half are getting less than that salary
number
Till a few years ago , all limited companies had to get
the annual salary of their top management ( directors ) , approved by the
Department of Company Affairs . And while approving , DCA applied some internal
" guidelines " ( - who should earn how much, and no more ! )
Companies learned to guess , as to what figure would
pass the muster !
I believe , nowadays , this is left for the shareholders
to decide
A few years earlier , companies were required to
publish in their Annual Reports , a section called " Employees Details
"
In this section , they were required to publish full
details ( Name / Birth Date Edu. Qualification / Date of joining / Current Exp
/ Past Exp / current salary etc ) of all the employees drawing more than Rs
3000/- per month
In a few years time , in case of a few large companies
, this section ran into hundreds of pages , as salaries kept rising
So the limit got progressively raised to Rs 6000/- pm
and later to Rs 12,000/- pm , until one day this requirement got dropped
No doubt , this section was most sought-after by
Headhunters / Bridegroom seekers , and avidly researched by all employees
across the companies to find out where they stood in comparison with their
colleagues !
Then , in 1978 , came Bhoothlingam Committee report
It recommended ( which got accepted by DCA ) that the
compensation differential between the lowest and the highest salary in a
company should not exceed 10 times !
But that committee never laid down any " Upper
Limit " for the salaries of the lowest paid workers - which kept rising , month
after month , since the DA ( Dearness Allowance ) was linked to Consumer Price
Index , which kept galloping !
On the other hand , Companies were not able to raise
the annual salaries of their directors , because of ceiling imposed by DCA !
As a result , this differential ( of no more than 10
times ) , kept shrinking !
I remember having projected the annual growth rate of
the salary of the lowest paid worker in L&T ( where I worked ) , to
estimate that it would overtake the Chairman's salary , within a few years !
Now contrast this with what Business Line ( 06 July ,
2015 ) reported as follows
:
-----------------------------------------------------------------------------------
Name of Top Honcho
........ Ratio { Own Salary / Median Employee Salary }
------------------------------------------------------------------------------------
* Y C Deveshwar................................. 439
* Mukesh
Ambani................................
205
* Aditya
Puri.......................................
117
* Vishal
Sikka......................................
116
* Chanda
Kochar...................................
97
* Azim
Premji.......................................
89
* Sikha
Sharma....................................
74
* Deepak
Parekh...................................
19
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
I hope this " market determined " and "
democratically arrived at " managerial remuneration will continue without outside
intervention
What companies want to pay their lowest paid workers
and their highest paid top honchos , should be left to their shareholders
But when it comes to the salaries of High Court /
Supreme Court Judges or Government Secretaries , is it not a travesty of justice
that , after 25 years of service , they
get paid , less than the starting salary of some 24 + fresh graduate MBAs ?
In a company called , " India Inc. " , we ,
the citizens are the shareholders
It is high time we start rewarding our " Top Honchos
" , commensurate with their responsibilities !
---------------------------------------------------------------------------------
hemen parekh
08 July 2015
www.B2BmessageBlaster.com
www.hemenparekh.in
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