Compensation package: Striking the Right Deal

 Purva Misra is an organizational effectiveness consultant with Hewitt Associates LLCMoney
makes the world go round, and no where is it truer than in the
telecom sector. This is the hottest, fastest growing sector
globally. Being responsible for stock market booms, huge
mergers, and cash rich sell-outs, telecom companies know what
they are worth. Understandably, so do their employees. They know
their skills are in tremendous demand. And their skills have no

These employees expect to
be treated with the proverbial “kid gloves” and
typically are at the asking end of any compensation
conversation. What makes their position easier is the constant
vying among companies to “poach” that “real whiz

The telecom sector is
perhaps the most sensitive to compensation differentials where
even small variations encourage employee movement. The type of
work is no doubt an important consideration, but lucre is not
far behind in the wish list of most professionals. In fact,
compensation is noticed as a powerful catalyst not only for job
change but also for driving employees to contribute more to the

So typically what kind of
salary packages do telecom professionals expect? How do I, as an
employee or prospect, know that I have got a good deal? As an
employee, what are some components that you could mention next
time you are in a negotiation situation?

Some tips on how to assess
your current or future compensation package are mentioned below.

Looking at
Your Strengths

A few years back, an attractive package offer may have consisted
of signing bonus, fixed pay, incentive compensation, and
benefits. However, today companies have increased
competitiveness in their rewards package and the monetary
component is no longer a point of sustainable advantage.
Companies are trying to make their “offer” at a more
fundamental level, which integrates employees to their overall
business growth and reputation. They are culling out the real
value of skills available with employee or a prospective and how
this would add up to their broad business objective.

This means that as an
employee, you need to understand what is the business and
accordingly position your skills as a tremendous value-add to
business growth.

What Are
Others up to?

It helps if you can do some quick homework before having a
compensation conversation. Get a rough idea of what your friends
are earning in similar jobs (this is a tough one as most people
would not be willing to share this piece of information!). The
Net is another place you can search. Even if monetary figures do
not get mentioned you can check about various people policies,
work environment, and stock options. This will give you an idea
of what other organizations are like in their overall philosophy
towards their employees. More often than not, companies with
favourable employee policies and a HR-friendly outlook reward
favourably also.

Compensation Menu
Monetary Components

Fixed pay Annual bonus Stock options Cash incentives Recognition programs — cash and non-cash Books and periodicals — professional development
Signing bonus
Retention bonus
Project completion bonuses
Skill related premium


Medical plans Health benefits (gym facilities on site, 
in health club) Insurance (Accident, life, etc) Club memberships Housing
Retirement benefits
Tuition reimbursements
Corporate credit card
Hard furnishing 

Work/life options

Work environment Training calendars Flexibility in work hours, compressed work weeks Working from home or telecommuting Part-time schedules
Company provided equipment (Laptop, 
phone-line connection at home, 
modem, etc.)

Comparing your current or
future workplace will give you some perspective of gaps or
potential areas of discussion.

“What are your requirements? What do you need from
life?” Does this sound like philosophy? Telecom isn’t
really! Having a clear fix on your own wants will put you in a
better position in several ways. For example, the type of
compensation mix would vary if you were single than if you had a
family. Maybe with a family you would place a higher premium on
benefits such as medical insurance and health checks. If you
were single, a cash heavy compensation structure may be more

Issues You
Need to be Aware of

Some issues are important to your compensation and career. Get
these answered to your satisfaction. For instance:

  • Is the
    company going to give stock options today or by a later
    date? What is the offering?

  • What is the
    mix of base and performance-based pay? How much is typically
    available for high performers?

  • What is the
    growth in the fixed pay? How often can one expect it?

  • What is the
    performance cycle like–quarterly, semi-annual, or annual
    reviews? Is it matched with payouts?

  • Are their pay
    differentials across skill groups and product-lines? What
    does this mean to your skill set? Is training given for
    certain skills?

  • Is fixed pay
    growth matched with vertical career moves or are their broad
    pay grades unrelated to career?

Components Available in the Market

When discussing your compensation, you can use the following
table to match the mix of cash based components, benefits, and
work/life facilities you are being offered–and define your own
package based on your need.If You Are
Thinking of Joining a Start-Up

Apart from all the areas mentioned above, start-ups present
unique opportunities. As a result, cash-based compensation may
often not be a major consideration for joining a start-up. You
may also like to consider:

  • Extent of
    equity being offered

  • Faster growth
    and career potential

  • Fun place to

  • Greater

  • More
    opportunity to define your own role

  • A chance to
    do everything

  • An
    opportunity to create and be part of a dream

  • Backing by a
    financially secure parent

  • Chance to
    work with a brand new technology and product

  • "Campus"
    type culture (night outs et all!)

Your Final
Compensation Decision

There is no "best" compensation. In fact, that is
quite a misnomer. What is "best" is the deal, which
works for you. And this will vary from person to person.
Compensation always has two sides–the total amount as well as
its break-up. Look for both when you sign up.

Also, there are items in
the overall offer, which cannot be quantified but are critical
to your overall wellbeing. Work/life options are one such area.
The whole gamut of HR policies is another. Keep these in mind as
well when assessing compensation. In fact, a study by Hewitt
Associates, a global management consulting firm, identifies
work/life options as one of the most critical factors for
employee attraction and retention.

So make sure you have
touched all bases before taking the final call!

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