The Hindu Business Line : <I>Salary stakes </I>

In the days before institutes of management became the ultimate dream of young graduates, there was an evening session for prospective applicants at which some of us, then recent graduates, spoke of what the IIM experience was like. I recall a typical Madras parent from the audience getting up to ask whether there was any assurance that his son too, upon graduation, could make a public speech as well as the speakers had done. We were, of course, flattered but somewhat flummoxed as to what to say.

The experience certainly at the Ahmedabad institute, where the case method was still the religion, required you to speak up, and make yourself heard against strident competition for air time, but of course the student had to have some natural inclination to do so and the basic talent. One supposes that, today, the equivalent question in every parent's mind would be about the chances of their wards' starting salaries making it to the headlines of newspapers. There is, perhaps, something slightly middle-aged in one's mixed reactions to such news being played up as if it were some kind of Derby amongst 24-year-olds, with weights and rankings shifting every day.

Surely, one feels, there must be more to a professional degree than salary, and that too such mind-boggling numbers? What matters is not just the starting blocks but the lifelong course. Even if one thinks that at that rate of wealth creation, one may not be tied to the yoke for thirty years, the evidence in the Western economies suggests that the opposite is the case.

I wonder how many dreamy-eyed parents, themselves at the end of staid and steady careers in public corporations — whose lifetime savings would not reach the level of this year's record salary — realise how tough life can be on the treadmill of the financial sector and in American companies.

There are enough stories one hears of companies folding up, merging and shrinking, and of jobs getting slashed and bonuses suddenly evaporating. Career progression in the foreign banking and securities market is hardly a smooth path. Many employers also operate on the principle of "pay twice as much as anybody else but sweat them thrice as much!".

Here's a thought. Journalists could be comprehensive and careful in reporting if, beyond feeding frenzied ambition, they did follow up stories on the record-breakers of earlier years and see where they have got to — in quality of life, in careers and, above all, in tenure on their first jobs. For, along with the trend of skyrocketing salaries is the pattern, once frowned upon by all, of average MBA tenures in companies lasting around three years through one's twenties and thirties. One could also look at others, including those starting own businesses or joining NGOs, who started as tortoises in the race and see where they got to!

A much wider issue that CEOs face is: What do we do with the existing managers' salaries even if young MBAs come in at a more modest six lakhs a year? Despite the usual arguments about change being inevitable, the fact remains that even the relatively young senior managers whom the young recruits report to might seem under-paid in comparison.

True, managements do increase overall compensation from time to time and the performance-based variable component of pay is increasing. Yet structural revisions are difficult to do every year. Here is a conundrum that the recruiters and the human resource profession have to mull over. As long as salary is seen as not only a reward but also a measure of how much your employer values you and where you stand among the rest, this is a hard choice with no easy answers.

S. Ramachander

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