Low Pay Isn’t Saving, Its Investing in Mediocre Things

N. Raghuraman, Management Guru

A few months ago, we hired a house-help, as the former shifted to another city after marriage. The new employees were in difficult circumstances and were in desperate need of a job. We first explained her responsibilities and then asked how much salary she would take. We were shocked to hear their price. We understood that her financial condition was so bad that she could not bargain.

Since we knew that someone would know the salary of the previous employee, we said that you will get the same salary as the previous employee. There was no limit to his happiness after hearing this. Ever since she started working, she has been working better than the previous employee in every aspect and with a smile. When we gave her extra money for extra work, she cried.

Most of us know the basic principle of economics that price affects quality. We are willing to pay more for reliable machinery because breakdowns are costly. We hire experienced lawyers in important cases, because mistakes are costly.

Yet some organizations expect highly educated professionals to deliver exceptional results at salaries that are not commensurate with their expertise. Greater Hyderabad Municipal Corporation (GHMC) is an example of this, where the job salary of a sweeper is higher than that of a skilled IT employee.

GHMC, in a recently released tender notification, is seeking professionals for posts like Hardware Engineers, Database Administrators, System Administrators, Network Administrators, Programmers, Team Leaders, GIS Analysts and Web Designers. This caught people’s attention because the salary offered was low.

GHMC proposed a monthly salary of Rs 28 thousand for 12 hardware engineers. The monthly salary for Senior GIS Analyst with M.Tech and three years’ experience was fixed at Rs 37,000 and for Web Designer with B.Tech and six years’ experience the monthly salary was fixed at Rs 42,000.

In contrast, a newly appointed sanitation worker will get around Rs 30 to 35 thousand per month. With increasing seniority, their salary can reach Rs 70 to 80 thousand. Interestingly, GHMC officials cited the reason that the pay scale revision of outsourced employees in the IT sector has not taken place.

The first consequence of this is that the best candidates do not apply. Skilled professionals know their worth. If they’ve spent years gaining education, certification, and experience, they naturally compare opportunities. Impractical salaries attract frustrated candidates, or people who view the job as a temporary stop until better opportunities arise.

The second result is more harmful. Even those who accept the job remain dissatisfied from the first day. Every assignment reminds them that they are being underestimated. ‘How can I contribute better?’ Instead of asking, ‘How quickly can I get out of here?’ No amount of motivational speeches and team-building activities can compensate for the persistent sense of injustice. The institution has to pay its hidden cost.

The attrition rate of employees increases. Projects slow down. With every resignation, knowledge goes out. Recruitment expenses increase. Managers spend more time finding new people rather than honing talent. Ultimately, customers also notice instability in service and execution.

But this does not mean that every startup or small business should pay as much as the multinational companies. There is a difference in resources. But fairness should never disappear. If cash is limited, organizations can compensate by providing transparent growth pathways, performance-linked incentives, learning opportunities, meaningful responsibilities and recognition. Employees often accept lower wages if they see a future. But they can hardly accept a situation where they are underestimated and there is no promise of growth.

The bottom line is that When people feel respected, they contribute mindfully. When they feel insulted they only give their time.

Make Dainik Bhaskar your favorite source on Google ➔