When Prime Minister Manmohan Singh called for ceiling on salaries for CEOs and Top Managerial staff in the private sector, there was stout opposition across the so-called India Inc.
But after seeing the way the recession has got even the decently paid American middle class on to the streets, the 100s of billions of rescue packages, the way these packages or doles outs are being used AGAIN to pay top honchos fat bonuses (for "retention" - as if they will be welcome anywhere else for getting the organzations into the mess that they are in) etc. I am pretty convinced that what Dr. Singh says it worth a serious consideration.
The basic axiom, TOO MUCH OF ANYTHING IS TOO BAD is working perfectly.
What the Americans did TOO MUCH is:
- emphasis on the "vision" that a corporate exists solely for the purpose of enhancing its "shareholder value" i.e. producing huge returns for the shareholder for their investments!
- neglect of basic employee welfare (by way of fair and equitable labor laws) - hire and fire became the norm, even if if the failure of the company was because of management decisions and recklessness - employees had no stake in the reserves of the company, which they help build in huge sums during good times! The bonuses given to them during good times is all that they can have, unlike shareholders / investors who get their regular payouts as well as "own" the reserves of the company
- living on credit and no thoughts on saving or investing for a rainy day - most Americans leverage hugely on credits and hence in the wake of a severe recession are left to live on unepmplyment doles and charity - entire families!
In India too, with Globalization, we have been passed on several of these "best practices" - today's top notch executives earn obscenely huge sums of money, stock options - valued at 100s of crores.
Some of the top executives in these so-called MNCs are plain and simple Indians, who went abroad for studies, got a job and citizenship there and come to India to work as "expatriets" on tax adjusted Dollar salaries! Ingenious isn't it. And these fellows will talk a big deal about "cost cutting" in these outsourced Indian companies - that pay pittance to the Indian labour and managers compared to their American counterparts.
Employees in the private sectors, even at entry levels get paid salaries that a general manager, in a Government undertaking, after 20 plus years of slogging may not earn! Unlike the defence forces, these blokes (Government officials) do not even get free rations or liquor or a hugely subsidized canteen or housing projects developed by the defence welfare associations!
Despite this huge pay all of these private sector employees take to huge borrowings - not knowing that the outsourced jobs an vanish at anytime.
The youngsters (corporate citizens) at the entry level invariably have bikes, mobiles, frequent pubs, buy only branded stuff using credit cards, take home loans (mortgages) just like the folks in the US - and even try to talk the the US folks!
All this kind of aping, certainly creates not only that our culture is greatly getting eroded, but also that a recession like the one in the US could simply send us reeling and several counts.
We need to ensure our corporates continue to imbibe the values that have endured for generations and have prudent policies relating to sound employment, pay at all levels and returns for the shareholders that is also reasonable. During times of difficulty, the reserves of the organization should be used for bailouts and not taxes collected by the Government from the public!
Corporate greed should be shut out, before it consumes India.
May God Save India!
- Shaji Lekshmanan
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