We asked our employees how much salary they wanted. And the results were…

I have spoken openly about my disregard for the way the annual appraisal process is setup in most companies (including at nearbuy.com too).

So while we did go through the process (hopefully for the last time) this year too, we decided to do something different.

We asked people for the salary they expected

Pretty wild, right?

Asking people what should their salaries be. To make sure what the system has generated as part of a process (that I myself don’t fully endorse) is in line with what they think they should get.

The results?

MUCH MORE SURPRISING than I imagined them to be

Headline:

People’s salary expectation (cumulatively) was only 2.1% higher than what the system was proposing.

Fine print:

This headline is laughable (and something that a publicity hungry writer would craft). Its like saying my left feet is in hot water and right one in cold, so on an average I am at room temperature.

Doesn’t mean shit!

Details:

The details – on each and every individual’s expectations, were what set the exercise apart.

193 people (or 66% of those part of the process) expect a monthly salary that is within range or lower than what the system is proposing.

And no – that is not because the system is proposing something generous. Instead, I’d like to believe its because people have a realistic sense of the value they add and the compensation that should be attached to it.

Action Plan:

  1. Ofcourse, we didn’t want to be horrible and reduce the proposed compensation for those who expected lesser. So we let the proposal be. What struck me though was the number of people who said “I am getting paid a lot more than I think I should!”. What have we done we have such awesome people. Wow!
  2. For those who expected marginally higher (within 5-10%), we looked at them individually and if there was indeed a difference between them and their peers at nearbuy.com – we corrected. Most of them though we left unchanged.
  3. The ones who expected significantly higher were the ones we really had to work on. To me, this is a red flag. Someone believes they are worth a LOT more than we think they are. So we spoke to almost all of them individually, checked their compensations against their peers, against the market benchmarks as well.
  4. What we realized – some of them were just “playing” on the survey (whats the harm in asking!), some of them were genuine faults from our side of bad benchmarking (and we thankfully corrected them) and most were just in need of a conversation – where once we opened up on how they felt and how we felt we were able to reach a shared understanding. No change required there.

Eventual outcome:

  • 292 people went through the process
  • Average increment of 17.4% across the company
  • 75 promotions this year

What I learnt from the process

  • Make yourself uncomfortable – by asking questions that will show who you truly are
  • Most people are not out there to eat you. They genuinely mean well and will be honest if they see the same from the other side.
  • The psychological positive impact of getting what you wanted, is unparalleled. It makes people feel valued and I would like to believe, acts as a massive sense of security (the two things that matter to all of us – security and appreciation).

Clearly, this was a case of “let’s do this and see where we land – even if the truth is harsh” and without any scientific rigor.

And while I am pretty pleased with the outcome, I would love to hear from the community their views on this experiment.

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