Reference no: EM132764613

Question

It was a hot afternoon in Ahmedabad and despite the air conditioner, Aman was feeling the heat. When he had joined SMI Corporate Training Solutions, a West India based training company in 2003, he thought it was the best opportunity he could have. His wife and parents were against his decision to quit a multinational to join a relatively unknown company. Aman, however, was confident about plunging into the new terrain.

Company had been profitable &was growing at an aggressive pace-from one branch to six within a short span of three years. The top management consisted of three well known industry stalwarts who had rich experience of working with Fortune 500 companies and were known to mentor young talent into leadership roles. Salary was as per industry average and to maintain internal parity, steep hikes were not even considered as an option, as a matter of policy. Benefits were many. There was no monitoring of arrival and exit time.

Employees had great flexibility to customize their office timings as per their convenience and also as per the traffic situation. Each employee had a health insurance cover not only for self and spouse but also for parents and in-laws. Subsidized food & non-alcoholic beverages, a well-stocked library, rest rooms, unlimited sick leaves, and free trainings were some benefits which were truly valued by the employees. Company had an informal culture with no dress code. Meetings never lasted for more than 10 minutes which meant there was no boredom, everybody spoke to the point and there was no wastage of time. Top management met the employees over a casual lunch in every branch once a month wherein conversation was kept easy.

Candidness was encouraged and appreciated. Employees could even register their opinions/complaints/grievances anonymously and action taken was within a fortnight on matters which warranted immediate attention. Career growth was on fast track. High performers (based on consistent high ratings for three consecutive appraisal cycles) were given exposure for further grooming. They had to undergo customized training & development programs for assuming leadership roles in future.

Aman had been one of the star employees of SMI and his bosses trusted him with majority of their crucial responsibilities. He had always risen to the occasion and never failed them. However, of late, he had started getting a strong gush of resentment and dissatisfaction when one task after another started piling up. The reason for this resentment was clear-he had overheard one of his colleagues discussing his salary, supposedly with a consultant, over phone.

Coupled with it, he did have some idea, based on certain authentic sources, that there was a clear cut salary gap between him and some of his subordinates who had joined post 2010.They were either earning more or almost equal to what he was earning. He had consoled himself with the usual understanding and arguments given in such cases: it was a tight labor market when he had joined, now it's not; hiring from external job market would obviously mean giving a good hike to them, etc. But as a matter of fact, he was clearly upset.

His managers, he felt, were thrusting on him greater shares of errands than ever before. They said they trusted him and hence were assigning him crucial tasks, one after the other. He had discussed the probability of a decent hike with his boss and the HR manager few days ago, quoting his contributions to the company. The resultant offer after this discussion was a 4% hike.

They had expressed their helplessness to extend beyond this limit as giving steep hike was against the company policy 'to maintain internal parity'. How can a figure in single digit be called steep? Funny! Aman sighed and with his shoulders down, retired to his cabin.

Question 1. What should be the further course of action for Aman?

Question 2. As a company with strict policies against giving steep hike to maintain internal parity, has SMI adopted a myopic view, & in turn is missing the bigger picture? In what way? Justify.