As the economy is back on the recovery track, businesses are facing a dearth of skilled and competent professionals — predominantly at the management and executive levels.
This is impeding in the growth of many firms and even sectors. Struggle to retain important, high-performing players are at an all-time high. A strategic performance-and-reward system is the key for any business to preserve the best resources and earn profits. An even-handed compensation package that rewards performance can also improve recruitment and retention exercises, enabling the company to accomplish business goals.
E-commerce start-ups in India are bleeding because of unrealistic compensation policies meant for mid and senior-level employees. Staff members are the essence of an organisation and motivation for performance is pivotal to inspire them for better delivery, which aids the company in escalation.
According to the industry stalwarts, ‘aggressive and higher reward components to acknowledge excellence’ is the way forward.
Speaking to the Entrepreneur India, Vinaya Varma, CEO of mjunction, said, “We have recently recalibrated the compensation structure to align it with the company’s high growth trajectory. The new compensation structure has been designed keeping in mind the competitive market positions and employee preferences.”
Varma has been with mjunction since its inception in 2001, as a founding member and has been instrumental in conceptualization, launch and ramp up of some of the company’s biggest ventures. Varma strongly feels that employee compensation structure will help businesses grow in many ways.
Enables A Company To Have A Sustainable Growth Plan
According to him, a competitive compensation structure is not only beneficial for the employees, it also perks up the company’s performance. “It shifts an employee’s attention towards generating more revenue for his/her organization and empowers them to overcome their departmental agendas. A holistic approach is constructed towards achieving growth by setting up business targets for the company,” he recommended.
Building Employees’ Interest
“Companies should reward meritocracy by offering a pay structure that focuses on a judicious mix of fixed and performance pay. At mjunction, it has been specially designed to reward our young workforce and to turn them more agile professionally,” added Varma.
Good Package To Attract And Retain Talent
“In my views, a compensation structure should be able to attract best talent towards an organization. Creating a talent pool within an organization requires meticulous tracking, selection and is extremely time-consuming. Hence, loss of talent is an organization’s loss. Focus on talent retention through a sound compensation. Through our salary structure, we are ensuring more cash in-hand of a young workforce, which fulfils an important objective of our talent retention,” vouched Varma.
Flexible And Adaptive Compensation Structure
“A planned salary structure enables a company to follow a disciplined and sustainable growth plan. A strong emotional relationship is established between an employee and the company, thereby motivating him or her to perform better. It also boosts the organization’s brand value and creates higher brand equity,” advocated Varma.
“I also feel that the salary structure should be more flexible and adaptive. In today’s environment employee needs are changing fast. An adaptive and flexible compensation module will go a long way in establishing trust with an employee. The relationship established can then be utilized for the benefits of the organization. A flexible pay structure also ensures that organizational changes are incorporated in the right manner so as to reduce friction and grievances,” he explained.
“With a change in the compensation structure, a company can move away from the policy of ‘one size fits all’. The compensation package should be a perfect balance between pro-growth and pro-employees in a high-performance environment,” Varma said.Prior to joining mjunction, Vinaya Varma was at the Tata Steel, where he had worked in several functional areas encompassing production, planning, sales and marketing. He is a Certified Professional in Supply Management (CPSM) from Institute for Supply Management (ISM), USA. As a practitioner of Theory of Constraints, he has attended several sessions of ToC at Goldratt House, Tel Aviv.