Please note how badly mutilated and torn the sheet of paper has become.
– Courtesy Karthi
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Category: salary
In government sector wages are easy to determine. Your seniority and experience determines your basic salary. Then based on the nature of the work, posting etc. your final pay package is determined. So effectively whenever a government servant states his designation, you can exactly know how much wages he draws.
In private sector, it is a bit awkward. The worker salaries are more or less standardized and everybody knows how much the other knows. The compensation package of the CEO and other top executives has to be disclosed to the shareholder (and hence public). Everybody knows Robert Nardelli received a $210m pay-off when Home Depot fired him for incompetence.
However what surprises me is that wages of the peers are rarely disclosed. What is so special about the white collar employees that their wages are never revealed? We all demand RTI (right to information act) in government departments when our workplace themselves lack it. I am a rational man, so I think there should be a sound logic behind all this.
Either the workers like you and me have a vested interest in not disclosing their salary. I am ashamed of the fat salary I draw and I do not deserve the bonus which the company gave me. Hence it is in my best interest to cover it up as much as possible.
Or the HR and management are screwing me. They pay me a quarter of what I deserve and hence they do not want me to be in the position to compare my salary with the others.
Since I cannot think of a third reason… lets analyze the 2 premises.
Worker: The Company would be a fool to overpay me. Even if due to a temporary market conditions I am getting more than what I deserve, the company will adjust it in the next pay review/hike or they might even fire me. Other reason could be that I live in denial and believe that I do not care about the wages.
Since both are weak arguments, I think it is the HR and management that want to deny me of this information. The management thinks that I do not know that my company pays that fresh graduate/new guy much more than what it pays me…
Government employees do not switch jobs that often because they know that they are getting a fair pay. Most job switches in private sector happen when the new company corrects the distortion and offers to give the employees what they rightfully deserve.
The constitution guarantees us “Equal pay for equal work”, almost all companies advertise “Equal opportunity employer”. Yet you give no evidence to prove/disprove this theory. Companies demand loyalty from the employees, but they spare no opportunity to con them.
Also do read this wonderful article. compensation and this
Continuing with my previous discussion:
I have a 6 digit CTC, a smaller gross salary, a 5 digit take home and a 4 digit basic salary.
To add to my confusion, I have small earnings via interest and stock-trading. Now these 2 components are essential when I want to compute my Net Worth, but they have no relation with the 45hr/week job which I do.
Now when someone asks me my salary I am totally confused what to say?
I follow a simple rule.
1) When IT asks for my salary (for PF, HRA, gratuity etc) I quote my basic.
2) When asked by a Head hunter I quote my ridiculous CTC.
3) When asked by a friend I want to impress, I even top it up with an extra stock earning to leave them extra dizzy.
4) When asked by my peer I quote my gross.
5) When asked by someone whom I owe money… it is always my humble take-home.
Can’t I live like a common man who says I earn Rs X and brings home Rs X. Why do I have to feel that every time I answer to this query I am lying or hiding something?
I am a strict follower of minimalism. I cheered when govt. introduced Saral to make my life simple. However can anybody tell me the significance of Basic salary and so many complicated structures? All my HRA, EPF, gratuity, leave encashment etc. is computed on Basic, but does it have a practical relevance?
For public/govt. sector, it is understandable that they have a basic salary and that is used to calculate all the allowances, perks, the seniority and rank. For private sector employees it is an artificial reverse engineering concept. They have the whole figure and then divide and subdivide it to come up with the basic (usually 40% of the gross) I won’t be surprised if someone has a basic pay of Rs 6457.45. (not a round figure)
Won’t it be simple if they simplify this and calculate everything on the basis of my gross? (K.I.S.S. Keep it simple, Stupid!)
If someone says I have a salary of 360,000/- I expect him to be earning 30k p.m. and not bringing home 14-16 p.m. I feel stupid when people announce bloated CTC and ever diminishing pay cheque.
What I understand by salary has the following legitimate components:
1) There is a take home component ( Basic+ special allowance + HRA) (which pays for all my expenses)
2) There is an Income Tax/ Professional tax etc. component (which runs the country)
3) There is a reimbursable component (like medical, telephone, travel, food, LTA etc.) (which helps me reduce my tax burden)
4) EPF (employee provident fund) (which takes care of my senile decay)
5) Assured Quarterly/annual Component (this does not include ####* marked performance bonus which fluctuates each year and can be withdrawn anytime)
Anything other than all these 5 components is artificial and a big scam. It only demonstrates the inefficiency of the company and its payroll department. My salary is not the place where you account for the units of electricity consumed for lighting my office, the rental of my cubicle, tissue paper or pencils used while doing genuine office work.