it comes to negotiating a salary, most candidates are struck dumb
at the amount of jargon floating around. As a result, they are
awed by the sum mentioned by the prospective employers, and accept
it with little or no discussion. Only when the first paycheck
comes in do they realise that they are victims of the great salary
scam! Here, Ms Hemamalini, an HR practitioner, advises candidates
on what to look for when negotiating salaries, and the possible
potholes they may encounter.
a candidate is moving into an MNC, he/she is likely to be taken
in when the prospective employer assures him/her that the basicsalary
will be 60% higher. The basic salary will certainly sound immense,
but the candidate should ask for more details.
is a tremendous difference in the compensation policies of an
MNC as opposed to an Indian company. Welfare components figure
largely in the salary break-up of Indian companies, while such
components are rare in an MNC. Often, these welfare components
will be on actuals. As a result, the actual jump in take home
may be only around 10% in comparison to the previous package.
of `company policy'
a candidate is brave enough to ask for details regarding salary
break-up etc, he/she is most likely to be fobbed off with standard
replies. Phrases like `company policy', `standard procedure'
and `industry norms' normally stop candidates cold. But to avoid
a rude shock later, persevere. Get the details.
major stumbling block is when medical benefits are mentioned.
Remember to ask exactly who all are covered by such benefits.Often,
candidates are told that medical benefits cover `family' but
are later told that `family' does not cover certain members.
For instance, `family' may exclude parents, and so, if you are
unmarried, you cannot share the medical benefits with your parents.
Also, check if hospitalisation costs are covered. Seek a definition
of terms that seem misleading.
performance is it anyway…?
out exactly how performance incentives are calculated. Don't
blindly accept the employer's assurance that these incentives
can `go up to' a certain amount! Also check what percentage
of the incentive is governed by the performance of the organisation
- at the global level and at the domestic level etc and how
it affects the percentage based on your individual performance.
that the salary always sounds more hefty when spoken of in annual
terms. Employers tend to talk of annual gross salaries, while
candidates think in terms of monthly take-home. To avoid any
confusion, ask for a detailed break-up and ensure that
both of you are referring to monthly take home.
out the sub components.
normally include the PF component while discussing salaries.
As a candidate, ask for exact percentages paid as PF, and when
you will be due for the PF benefits. Also, while gratuity and
superannuation amounts are often covered in the initial salary
break-up, remember to ask when exactly you will receive the
benefits. Normally, an employee needs to have worked for
five years in an organisation to be eligible for gratuity. Superannuation
benefits, on the other hand, may vary, as they are governed
by company policy. Make sure by asking for details.
reimbursement worth it?
employers promise many benefits - leave encashment, transport
allowance, superannuation benefits etc - remember to ask when
you can avail of these, how payment will be made (as a lump-sum
or on a reimbursement basis on production of bills), and how
long you will need to work to take advantage of these benefits.
days, employers use stock options to dazzle prospective candidates.
Often, two options are offered - a high salary with no stock
options, and a somewhat lower amount with stock options. Stock
options may be the in thing, but check if the shares of the
company are worth owning. Also, remember that these options
will be valid only if you work in the company for a certain
period. Again, ask for details.
for details regarding relocation costs - will you be reimbursed
and how much will you get? For instance, if you are working
in Chennai, and get a job offer from a company in Mumbai, your
salary may sound much higher due to the change in cost of living.
But check if your relocation cost (freight, moving charges etc)
will be borne by the new company. Seek clarifications regarding
cost to company.
last, but definitely not the least, get it all in writing.