salary secrecy ob ppt

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    Should salaries be kept secret?Organizational BehaviorNovember, 2010

    Bhavya Khurana (10DCP- 065)

    Kapil Agarwal (10DCP- 071)

    Manu Vijaykumar (10DCP- 076)

    Mathew Joseph (10DCP- 077)

    Mridul A. Greenwold (10DCP-078)

    Sahil Panjwani (10DCP-089)

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    1. Brief Overview of Subject companies

    Bharat Petroleum Corporation Limited

    Kent Builders & Developers

    2. Research methodology

    3. Inferences

    The Case for secrecy of salaries

    The Case against secret salaries

    4. Equity theory

    5. Conclusion

    Contents

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    Bharat Petroleum Corporation Limited (BPCL) is one of thelargest state owned oil and gas company in India.

    It is involved in the refining and retailing of petroleumproducts.

    Fortune Global 500 rank of 287

    BPCL is often referred to as an MNC in PSU garb. It isconsidered a pioneer in marketing initiatives, and employsBest in Class practices.

    Bharat Petroleum Corporation Limited

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    Kent Builders & Developers

    Kent Builders & Developers are creators of premiumresidential and commercial projects since 1987.

    They have covered the entire gamut of construction ventures inresidential projects, integrated townships, IT parks,commercial complexes and hospitality sector.

    They have received the Sky Lounge award and the Bajaj Houseaward

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    We have considered a sample of twenty people from the two companies

    Kent Developers had the policy of keeping the salary secret

    BPCL revealed the salary of their employees

    Information was gathered with the help of a questionnaire preparedwhich included five questions which are as follows:

    Should salaries be kept secret?

    Will you reveal your salary to peers if it is kept secret?

    What are the benefits of keeping the salary secret?

    What are the benefits if not keeping the salary secret?

    Any other comments?

    Research Methodology

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    Agree, 70%

    Disagree, 30%

    70% respondents supportedtheir companys policy.

    Agreement with companys policy

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    Case for secrecy of salaries

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    Name & designation Reasons

    M. F. BalasinorwalaCEO

    Prevents increase inWorker rivalry

    Namita ShirodkarSecretary

    Avoids conflicts withinthe company

    Keerthi Reddy SeniorManager

    Lose faith in the company

    Workers must be on goodterms with each other

    Pradeep NagpalCFO

    Create bad blood amongworkers

    Maintains Goodwilltowards each other

    Avoids Confrontations

    Dominic RoderickHead of Security

    Waist of company time ofresponses

    Hussain DaruwalaDoes not effect theperformance

    Gaurav NagpalOffice

    Administrator

    Leads to unnecessary

    power struggles

    Maintains goodwill

    Avoids conflictswithin the company

    AvoidsConfrontations

    There is no benefitof disclosure

    Leads tounnecessary power

    struggles

    Lose faith in thecompany

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    Case for secrecy of salaries- Kent

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    Top reasons in support for salary secrecy

    1. Avoids employee conflicts/maintains goodwill

    2. There is no benefit of disclosure/waste of time

    3. Disclosure leads to unnecessary power struggle

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    Case against secrecy of salaries

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    Name & designation Reasons

    Akhil KhambataCOO

    Openness and trust witheach other which leadsto a better workenvironment

    Encourages confidenceamong workers

    Anushil KadamCMO

    Secrecy encouragesrumour, gossip andmisinformation

    Saifuddin Poonawala

    Marketing Executive

    Valuable way to measure

    one's performance withone's own peers

    Better for companieswith large workforce anddepartments withconstant competitionamong them

    A way to compareperformance withpeers

    Encourages opennessand trust leading tobetter environment

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    Case against secrecy of salaries- Kent

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    Name & designation ReasonsAshokKumar(sales exec)

    Creates trust in theorganization

    Amit Sarkar(Sr. manager HR)

    Create employeeconfidence in theorganization

    Neha Das(Sr. manager mktg.)

    Prevents bias

    Udit Saluja(Marketing exec)

    Prevents bias

    Prevents rumors

    Mayur Bhatia(sr. manager HR)

    Prevents spreading of

    rumorsEmployees have a rightto know

    Sandeep Mishra(Jr. manager acc)

    Salaries will become fair

    Dhruv Dhawan

    (business strat div.)

    Helps distribute work

    fairly

    Prevents bias

    Creates trust in theorganization

    Prevents rumors

    Salaries will be fairer

    Leads to fairdistribution of work

    Employees right

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    Case against secrecy of salaries- BPCL

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    Top reasons against salary secrecy

    1. Creates an environment of trust in the

    organization

    2. Prevents bias/leads to fairer salaries

    3. Prevents spreading of rumors

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    Application of Equity Theory

    1. Kent developers practice secrecy to avoid inequity

    Disclosure leads to referent comparison leading to

    possible de-motivation.

    2. BPCL tries to use inequity as its strength

    1. Disclosure leads to competition which provides

    motivation to improve efficiencies

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    Related cases

    Transparent salaries lead to better working environment

    Semcos no secrets policy

    Brazilian diversified-interests company Semco offers a unique template for profits

    through openness. Among a range of workplace democratisation strategiesimplemented during the 1980s, all salaries are transparent and debatable.

    The division of profits between workers and managers is fixed; and evenexpenditures need to be approved by a committee of workers representatives.

    Far from a fiscal disaster, Semco has become well-known throughout the world forthe success of these initiatives. Its CEO Ricardo Semlar is a respected HR thoughtleader and visiting scholar to Harvard Business School.

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    Disclosure leads to fairer salaries

    Singapores National Kidney Foundation (NKF) scandal of 2005

    Whilst the $600,000 a year pay packet for CEO TT Durai was certainly higher than

    most would have expected, it was revealed during a defamation trial that he had alsoreceived annual bonuses of between 80% and 100% of that amount.

    Peanuts, one observer had remarked but perhaps the real problem was thesurprise and secrecy. Had NKF and its CEO been transparent about the pay andother expenses, would the donating public have felt such a betrayal of trust?

    Related cases

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    Salary secrecy avoids employee conflicts

    Case ofNYSE chairman

    Richard Grasso, chairman of the New York Stock Exchange, quickly went from folk

    hero, for the way he got the exchange running again after the terrorist attacks ofSeptember 11th, to the incarnation of corporate greed when it was revealed that hewould be awarded $140m in accumulated benefits this year.

    Mr Grasso tried to stem the tide of outrage by agreeing to forgo another $48m dueto him, but that appeased no one, and he was forced into an ignominious

    resignation.

    Related cases

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    Thank you