Should you pay more for top-employees?
IT IS ONE of the unwritten tenets of the modern corporate world that an organisation is only as strong as its star performers! Therefore, staffing the company with top-notch talent is the key requisite for keeping pace with the competition in the market.
Needless to say, talent comes at a price. Hiring managers need to pay a premium for acquiring the best employees. In fact, a recent survey says that top companies spend at least 10% more for acquiring top-performers. They get paid more and this is what essentially differentiates them from the others.
Is it justified?
One HR expert argues, `Given today's fierce competition for talent, getting the best people for certain positions sometimes requires compensation packages that may look excessive on the outside, but that reflect true competitive realities'. After all, if the organisation wants to acquire quality, it will have to pay accordingly. And shelling out more for recruiting the crème de la crème is definitely worth it for the organisation. Needless to say having top-of-the-line employees will only help in improving performance, stimulate innovation and increase productivity and profit margins of the organisation.
Companies should bear in mind that talented employees are worth their weight in gold and it is only fair to pay them well. Infact, they should be seen as an investment for their own future.
From the frying pan into the fire
Even as HR managers try to lure the best with a bigger pay packet, they cannot avoid creating heartburn among the existing employees. Undoubtedly, they will be lot of censure, as the top talent becomes the source of dissent in the staff.
The management should be open and honest right from the start to remove any perception of inequity and discrimination. They should explain to employees on the same hierarchical level as the new incumbent about the exceptional talents the said person brings with him and how it will benefit both the employees and the company at large. Making them realise that the performance requirements necessary to match that of the new person may be beyond their skills or commitment level will also remove any misgivings. But this is a tricky situation and needs careful handling.
Concurrently, companies can also inculcate a `pay for performance' system to motivate employees to work harder and compete with the new talent. As an employment attorney opines, `If you have a legitimate need for bringing in top talent at a higher compensation rate, make it clear you are going to allow other employees the opportunity to compete'.
Belling the cat
Highly specialised and top-shelf professionals have the upper hand as they have the bargaining power and can demand handsome salaries and benefits.
However, this does not mean that organisations can acquire the hard-to-win talent only with an attractive compensation package.
Instead of squeezing their budgets tighter, they can offer other options like signing bonuses, allowances, reimbursements and an array of perks with a slightly higher starting salary. This smokescreen will also help in controlling the dissent over the pay differences.
At the same time the management should continue monitoring performance to ensure that the new employee justifies the exorbitant salary he is commanding. All said and done, the management has to realise that the very best come at a high cost and be prepared to undertake them before making that hiring decision.
IT IS ONE of the unwritten tenets of the modern corporate world that an organisation is only as strong as its star performers! Therefore, staffing the company with top-notch talent is the key requisite for keeping pace with the competition in the market.
Needless to say, talent comes at a price. Hiring managers need to pay a premium for acquiring the best employees. In fact, a recent survey says that top companies spend at least 10% more for acquiring top-performers. They get paid more and this is what essentially differentiates them from the others.
Is it justified?
One HR expert argues, `Given today's fierce competition for talent, getting the best people for certain positions sometimes requires compensation packages that may look excessive on the outside, but that reflect true competitive realities'. After all, if the organisation wants to acquire quality, it will have to pay accordingly. And shelling out more for recruiting the crème de la crème is definitely worth it for the organisation. Needless to say having top-of-the-line employees will only help in improving performance, stimulate innovation and increase productivity and profit margins of the organisation.
Companies should bear in mind that talented employees are worth their weight in gold and it is only fair to pay them well. Infact, they should be seen as an investment for their own future.
From the frying pan into the fire
Even as HR managers try to lure the best with a bigger pay packet, they cannot avoid creating heartburn among the existing employees. Undoubtedly, they will be lot of censure, as the top talent becomes the source of dissent in the staff.
The management should be open and honest right from the start to remove any perception of inequity and discrimination. They should explain to employees on the same hierarchical level as the new incumbent about the exceptional talents the said person brings with him and how it will benefit both the employees and the company at large. Making them realise that the performance requirements necessary to match that of the new person may be beyond their skills or commitment level will also remove any misgivings. But this is a tricky situation and needs careful handling.
Concurrently, companies can also inculcate a `pay for performance' system to motivate employees to work harder and compete with the new talent. As an employment attorney opines, `If you have a legitimate need for bringing in top talent at a higher compensation rate, make it clear you are going to allow other employees the opportunity to compete'.
Belling the cat
Highly specialised and top-shelf professionals have the upper hand as they have the bargaining power and can demand handsome salaries and benefits.
However, this does not mean that organisations can acquire the hard-to-win talent only with an attractive compensation package.
Instead of squeezing their budgets tighter, they can offer other options like signing bonuses, allowances, reimbursements and an array of perks with a slightly higher starting salary. This smokescreen will also help in controlling the dissent over the pay differences.
At the same time the management should continue monitoring performance to ensure that the new employee justifies the exorbitant salary he is commanding. All said and done, the management has to realise that the very best come at a high cost and be prepared to undertake them before making that hiring decision.
PAYAL CHANANIA
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