This article has been written based on the experience that was gained by working globally across several companies from all sectors including Finance, eCommerce, Education, Healthcare
What is Salary ?
Salary or cash or currency can be thought of something which is equivalent to electric current in machines.
For example, let’s assume there is an electric fan running at 120 volts and drawing 0.5 A current. For this fan to operate there is a range between which if the current is passed, it will work. It will not work if the current is less than a minimum value. And if we pass the current more than its rating, then it will damage the inner coils permanently making it unoperational.
Similarly, the amount of salary given to any employee has a range. And the employee cannot be given below a certain range. Or above a certain range. As in both cases either it will make the employee unproductive or he will get burnt out with excess salary.
Now the basic necessities for any person assuming he has no dependents and by himself in India will be in the range of 5,000 to 15,000 per month. Adding some other costs we will round it off to 2 LPA(Lakhs per annum)
Why are companies overpaying him by an additional 4 LPA ?
– Is this because he increased the company sales by 5x ? No
– Is this because he is more skilled or talented ? No
– Is this because of his education, family background ? No
– Is this because of Chat GPT/AI ? No
The reason for this is different. For this you will have to look at this situation from the company perspective. Every company has a budget allocated for salary which they have to spend within a financial year. However they have to try their best to avoid its wastage. And give excess money only to certain types of employees. Below are the characteristics of such employees.
– They are definitely skilled and talented in their job.
– They will have a very basic standard of living (5,000 to 15,000 per month)
– They know that money is like current which cannot be stored permanently. And just like their job, they are equally skilled in managing its flow without getting burnt out.
– The excess money that they have has to be returned by them back to the community either as Tax, Donations or any other legitimate charity.
So to sum it up, employees primary job is to learn and improve constantly for being relevant in this ever changing market. And if your salary is 6 LPA, in addition, the companies also expect your contribution to the society to be more, which is secondary and only happens with experience.
Entrepreneur 