HRM – “The Practice of Withholding Salaries” – (MN2M)

MN2M = My Notes To Myself

Even today, in my part of the world, there are companies that resort to ‘Withholding of Salaries’ of its employee(s), for whatever reasons. Primitive actions, I would say.

Well, if a company decides to terminate the services of an employee, it may withhold the salary of that employee (to recover the dues, if any) and make the final payment along with the settlement, at the earliest, as per company norms. For other situations, ‘withholding of salary’ should be avoided.

Many a time, salaries are withheld on flimsy grounds or at the whims of a Reporting Authority. The ramification of withholding-the-salary is no less than issuing a show-cause notice to an employee.

Since his other colleagues will know of his salary having been withheld by the company, it tantamounts to belittling the employee among his other colleagues --- subordinates as well as peers. Not to speak of the hardships that he would have to face at home for his monthly domestic expenses.

Some perverted sub-ordinates and peers may also use the opportunity to indirectly antagonize or belittle him, like the typical mother-in-law as depicted in our Indian films.

We must remember that the moment a salary is withheld, the employee is insulted; it is fait accompli. Since one cannot erase such incidents from one’s memory, the insult will remain in that employee’s mind forever. No employee motivation exercises, HR programmes, … will ever remove the residue of that insult from the affected employee’s mind.

Some of the colleagues of the affected employee would also develop a negative image about the company. There would also be discussions and gossips on that issue in the cafeteria, at informal gatherings, … which are undesirable in any organization.

Companies must therefore have a strict and clear policy on the withholding-of-salaries such that no Reporting Authority would take undue advantage in spoiling the employer-employee relationship. First of all, the practice should be avoided. However, if the salary of an employee has to be withheld, it must have the written approval from the top management. Top Management could be a single person (in smaller organizations) or a Committee in large organizations.

Recently, I was privy to one such incident in another company where the affected employee (a senior person) submitted his resignation giving no room to the company for re-conciliation. And, that company lost a very important resource for a silly action of ‘withholding the salary’ (on a flimsy ground) while releasing others salaries. That incident prompted me to pen my thoughts on ‘withholding of salaries’.

Jaikishan - 30th May 2010

MN2M – Continual Improvement – To Remain Relevant In Industry – 2010 05 30

MN2M = My Notes To Myself

If we are not getting any new assignments that are different from what we have already done earlier, then we are stagnating and unknowingly getting into a ‘comfort zone’ in our life. We may even term the ‘comfort zone’ situations as no-learning or no-growth phases in our career.

Such situations are bad not only for individuals but also for the organizations that employ them. It is therefore the responsibility of the organization to ensure that the quality and skillsets of its workforce are continually enhanced. It will thus ensure the continuity and competitiveness of the organisation in the dynamic market since an organization’s quality is that of its workforce, at any given point of time.

Organisations can identify the areas-of-improvement/development desired in every employee through a proper annual Performance (Assessment) Management System (PMS). Ideally, there can be an interim assessment/review mid-year to enable the workforce to take corrective actions, if required, for bettering their performance and in enhancing their performance/experience.

If an organization does not engage in serious annual PMS, it would find it difficult to retain performing workforce, even if a good remuneration package is offered.

Jaikishan (30th May 2010)
Filename: MN2M – Continual Improvement – To Remain Relevant In Industry – 2010 05 30