An Individual Salary Scale

'We are good paymasters. We have provided x% salary increases every year for last y years.'

'We are competitive paymasters. Our salaries are at x percentile of the market.'

These are some usual statements I have heard companies make to showcase to employees/prospective employees the external parity of their salaries.

I often felt these statistics revealed necessary but not sufficient data for a ‘particular employee’. On second thoughts, that’s obvious given that statistics are calculated on basis of a ‘representative employee’.

Hence a particular employee might still be left with a question – ‘so how competitive is my salary wrt market? Is external parity of my salary high, medium, or low?’.

Managers usually respond to such questions by sharing ‘representative employee’ data. But employees also compare their particular situation to anecdotal evidence e.g. – what their friends are earning in other companies, what exiting employees are being offered.

Manager may well counter anecdotal evidence by sharing compensation benchmarking data. Frankly, that’s the best a manager can possibly do.  But compensation benchmarking data is still for a ‘representative employee’.

Can an employee find some compensation comparison data point which is more specific/particular to his/her situation?

A few years back I formulated a relevant methodology specific/particular to an employee. I must share that this makes more sense from an Indian market perspective – given the consistently high salary growth rate in India over last decade.

An employee could look at ' his salary grows y times in how many years’.

For e.g - let's take y as 2. Hence metric is ' your salary doubles in how many years'.

If your salary is doubling every 5 years, your salary is growing annually at 15% (calculate it for yourself J)  That’s a little higher than annual salary growth rate in India for last decade. So you probably are doing well for yourself.

If it’s doubling every 4 years, your salary is growing annually at 19%. If that’s the case, you are doing really good for yourself.

If it’s doubling every 3 years, your salary is growing annually at 26%. If that’s the case, you possibly are doing damn good for yourself.

Do a quick math and check for yourself what rate your salary has been growing at. L

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Sourav