This is the month of April. Many employees will eagerly
await their compensation revision. The pleasure and pain both come because of
one simple act: Pay differential. High performers are paid more, others
relatively less.
In the organisations this may be a big emotive issue, the
difference in increment is not very substantial. It pales before what I am
going to write about.
Take a medium size organisation. Here is what typically
people get paid.
Contract worker Rs 6500 pm
Permanent worker Rs. 30,000 pm
Management Trainee Rs. 1,25,000 pm
Managing Director Rs. 50,00,000 pm.
So the MD draws 167 times a permanent workers salary. He
draws 40 times the salary of a management trainee. And he draws a whopping 769
times the salary of a contract worker who is paid the minimum wage.
We may wonder what should be the right multiple. Is there
any norm? I did some study and here is the result. The table tells us what according to various people was the right differential. This reflects the ratio between the salary of the lowest paid worker and the highest paid executive.
Please think what the
appropriate multiple should be. Do leave a comment.
Pay Differential standard suggested by
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Pay Differential
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Remarks
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George Orwell
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10
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John Pierpoint Morgan
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20
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Peter Drucker
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20
|
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Switzerland Proposal
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12
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The proposal was rejected
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Sixth Pay Commission
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11
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Based on hearsay, Needs confirmation
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Bhoothalingam Committee
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16
|
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Plato
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4
|
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David R Francis about major US Corporations
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379 in 2007 ACTUAL
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His article in Christian Science Monitor
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David R Francis about major US Corporations
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42 in 1980 ACTUAL
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His article in Christian Science Monitor
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Vivek