Pay gaps need to be bridged, says Infy’s Pai

HYDERABAD: Prime Minister Manmohan Singh’s suggestion that the industry should limit the pay of promoters and chief executives appears to have found some takers in Indian industry. TV Mohandas Pai, director & member of board, Infosys Technologies on Friday said, the huge differential between the salaries of top-level management and other employees in a company could lead to lower engagement levels and ultimately hamper business interest.

Addressing a leadership session at the CII-HR conclave, Mr Pai said, “The gap in salaries of a CEO and other workers in a company is enormous in India and it is growing. We need to bridge this gap by making employees part owners of the company. In order to be a successful leader, one needs to forego his ego and manage people, who are brighter and more talented than oneself.”

According to him, this huge gap in salaries mainly exists in the US and India. “In Europe, the differential is less. We need to take efforts to increase the engagement level of our workers and this gap could be an impediment in that. We should make employees feel that they are part of the organisation. Focus should be on building organisations, where people can dissent. To achieve this, we need to create a transparent and collegial culture,” Mr Pai said, addressing the HR conclave organised by CII.

Agreeing with him, Grow Talent chairman and managing director Anil Sachdev said, nowhere in the world such obscene difference in salary levels prevails. “In the US, CEO salaries are high. But the gap between top honcho and the immediate subordinate will not be as high as that in India,” he said.

Blaming the supply-demand gap in talent pool availability as a reason for this gap, he said, organizations should give more opportunities to junior level workers so that this gap could be bridged. “Unless we do something, it could lead to unionization and workers unrest. It is the service industries, especially consulting, investment banking and IT sector, which are the main contributors of this huge divide in salaries,” he added.

However, Accenture India head (HR) Rahul Varma said, there was no empirical evidence to substantiate that huge differential in salaries exist in the country. “Considering that responsibilities and challenges faced by the top-level leadership and junior level vary, salaries also bound to differ. What an organization needs to emphasize is on following a scientific pattern to decide this differential. It should be benchmarked against the market and the demand-supply gap. In fact, huge salaries of the top-level management should work as an aspiration factor for other employees to grow and develop their career in an organisation,” Mr Varma said.