What kind of people will receive increments?

It’s that time of the year when one signs the appraisal forms. It’s something that was an exception for some, the same time last year and for many it was a luxury their employers could ill-afford. Blame it on the economy, blame it on the client, they said and paycheques were trimmed and to some, they said there are none to be given out anymore.

But that was then. Cut to now, one has seen the global economy recover, bit by bit and the current quarter has seen holding companies of global advertising networks print more of those appraisal forms and prepare themselves to sign those increment letters.

What makes this year’s round of increments interesting are the criteria employed for evaluation of agency staff and the nature of distribution of spoils on the back of resilient clients. What kind of people will get increments this year, what level of employees get higher percentage of them and when do these increments become effective, are some questions Campaign India sought clarity on, from agency chiefs. Some agencies, they say, are yet to decide on when the increments become effective – it could stretch till June - since global bosses will first assess the largesse that can be handed out after fourth quarter results.

Arvind Sharma, CEO, Leo Burnett says, “We’re in conversation with our global network to make increments for all our people a reality. With the overall Indian economy showing a healthy - may be even 8% growth - if we don’t want to lose people to other industries, we should go back to normalcy. And with revenues growing again, we can afford that.”

Sharma adds that the inflation rate has historically been high in India and this year is no different. “Taking that on board, our agency management’s view is that all our people should receive at least a base level of increment. And then depending upon their contributions, good to outstanding performers should receive higher levels of increments. This should apply across functions and levels.”

Suman Srivastava, CEO, Euro RSCG says that a large variable component of compensation would be a good idea. He adds, “If increments are a reward for good performance, then there is nothing to be paid out, since most people did not perform well at all. However, loyalty may need to be rewarded. The junior most people are most likely to receive increments since they have stuck with the company through the bad times.”

 

Ravi Kiran, CEO-South Asia, Starcom MediaVest Group agrees 2010 undoubtedly is an important year for increments and that it is not unfair for people to expect that increments will offset real inflation. “The last one year has had a stablizing effect on employees since they’ve realised that it’s better to stick and rise in the company, rather than switch jobs. They’ve also learnt that 100-odd people taking a modest increment is better than a handful of people taking a huge increment.”

 

 

Ravi Kiran, CEO – South Asia, Starcom MediaVest Group

“2010 is certainly an important year for increments. Both clients and agencies have realised that the year looks optimistic. If I’m a performer, then I’m certainly looking for an increment and this year is no different than the other. At Starcom, increments are linked to performance versus potential. It is not unfair for people to expect that increments will offset real inflation. 2009 has also made people mature and had a stablizing effect since they’ve realised that it’s better to rise and stick, than switch jobs. They’ve also realised is that 100-odd people taking a modest increment is better than a handful of people taking a huge increment.”

 Arvind Sharma, chairman of Indian sub-continent, Leo Burnett
 “The world economy is still not out of the woods and most global communication groups still have salary freezes in place. However, all forecasts say that in 2010, the Indian ad industry will grow at well over 10%. At Leo Burnett we can sense that in our own revenues which are up 25%+. If we want to avoid losing people to other industries, we should return to normalcy. With revenues growing again, we can afford it. All our people should get atleast a base level of increment. Good to outstanding performers should receive higher levels of increments. We’re in talks with our global network to make increments for all our people a reality.”

 Suman Srivastava, CEO, Euro RSCG

“Bad years always create challenges and 2009 is no exception. If increments are reward for good performance, then there is nothing to be paid out, since most people did not perform well at all. However, loyalty may need to be rewarded and increments also work as incentives for a good year ahead.  Junior level people who have stuck with the company through the bad times are most likely to get increments. As you go up the pyramid, the weightage of performance tends to increase.  So perhaps we will need to think harder about them. High performers will benefit from a large variable component in compensation.”

Srinivasan K Swamy, chairman and MD, RK SWAMY BBDO
“In 2009, we by and large met our revenue and profit targets as a company and did not renege any of our employee commitments and gave variable pay based on 2008 performance to all eligible employees. We also gave increments in many of our offices which showed positive performance. In 2010, we see a double digit growth in all our offices/divisions. We have budgeted for increments for all employees, informed them of their certainty this year and have already disbursed it to many of them. We expect our stars who ‘exceed our expectation’ to get to much higher increase than employees who just ‘meet expectation’ in performance.”

 Charles Cadell, CEO, Lowe Lintas

“Lowe Lintas will be giving increments this year. On average, they will be double digit though there will be wide variance in them based on performance evaluations that are ongoing now. Lowe Lintas is applying a rigorous evaluation procedure that will seek to ensure our top performers are given significant rewards. This methodology is being applied across the entire company. We are hoping to pay increments in the first quarter and have told our staff as much. We are however paying close attention to our first quarter revenues to ensure we believe the company is in strong growth before we commit to this.”