From a dynamic appraisal process to an open compensation system, companies are revisiting traditional ways of assessing employees.
The process of performance evaluation has become more frequent with some organisations regularly promoting people during the year while a few others have shifted to an open salary system to boost transparency.
In a departure from the norm, Sahaj Software Solutions, a startup focused on AI in data-led solutions, follows an open compensation policy. This is based on the belief that power should be decentralised and people should be empowered to collectively decide on salary hikes.
Read More:– GSTN Defers By 3 Months Implementation Of E-invoice Reporting Time Limit
Wage bill hikes at Sahaj are debated across the organisation with every person’s salary being an open book. Compensation is determined by team workers in sync with market dynamics.
“When we founded Sahaj in 2014, we decided there will be no hierarchies. Every month people get to see the balance sheet of the company and everybody is a CEO. One of the first steps we took was to implement open salaries, which means anything that people earn in the company is going to be visible to everyone,” said Akash Agrawal, cofounder & CEO of Sahaj Software. This year, Sahaj is taking a step further and is asking people to set their own annual hike percentages. “If there is a group of 90 people in an office, they come together, look at each other’s feedback, and apply those average hikes depending on who should be rewarded more and who should be given less,” said Agrawal. When a single manager appraises a bunch of subordinates, there are greater chances of personal biases coming in, Agrawal reasoned.
Read More:– Interview | ‘It’s much harder to look for an exit via IPO,’ says Rishi Mandawat, partner, Bain Capital
A majority of companies do not follow an open salary system. But many are adopting processes to ensure there’s pay parity. At Ericsson, regular performance check-ins are conducted and it is left to managers to decide on how often during a year they want to hold such discussions.
“When it comes to compensation, we create a huge amount of consistency in the way salary ranges are managed. We encourage people to keep salary conversations confidential. But for us pay parity is absolutely a top priority,” said Priyanka Anand, VP &head HR, Ericsson (Southeast Asia, Oceania & India).
The acceptance of an open salary system, said Anand, would depend on the maturity of the market and the talent base. “When there’s fierce competition between players, it would not be advisable to keep an open salary system,” said Anand.
Read More:– What Is The Difference Between A Salary And A Savings Account?
Publicis Sapient, a digital business transformation and consulting firm, follows a dynamic appraisal process where people do not have to wait till the end of a year to get promoted. From twice-a year promotion cycle to monthly promotions, people are now eligible for an elevation, provided there is financial justification, a capability expectation, and a role.
Read More:– Mankind Pharma IPO Listing Tomorrow: GMP, What Experts Say About Listing Gains
“After carefully reviewing the feedback gathered during our listening exercises, we recognised that our employees expressed dissatisfaction with the frequency and quality of growth-related conversations and feedback. Additionally, there was discontent with the six-month wait for promotion eligibility. ” said Kameshwari Rao, global chief people officer at Publicis Sapient. Employees at Publicis Sapient proactively seek career conversations with their managers, usually on a weekly basis.
