Expect a 40-50% increment if you are working with a startup

The appraisal season is finally here! Hopes, happy times and life’s good are in the air. Working with a startup has its own benefits as always! The startups are giving appraisal a whole new dimension. From doubling salary to rewarding foreign trips – the startups are rewarding the best performers like never before.

As per a news report by The Economic Times, besides taking home increments of 40-50% plus, appraisal also includes hefty cash bonuses and ESOPs.

"Sky is the limit for top performers," Amit Sinha, VP-business and people, at Paytm told the Economic Times. It is giving 50%-plus increments for top performers and four-fold increase in bonus payouts. "Ours is a knowledge-based industry where experts add disproportionate value and thus get compensated accordingly," he added.

Established companies, however, are giving out only 18-20% increments this year to top performers, according to recent surveys by firms such as Aon Hewitt. Cash-flush startups are rewarding top performers disproportionately more.

At MyRefers, founder and CEO Lalit Bhagia told the ET, top performers, especially at the entry level, got mid-year increments of 15-25%. Another round of increments” of between 15-50% depending upon the level and performance " is on the cards.

"The salaries and increments are commensurate with the scale of the opportunity these companies are going after," says Sandeep Murthy, partner at venture capital firm Lightbox Ventures.

"There is a challenge to find enough of the right qualified talent. In that context, paying these kind of salaries is justified," says Murthy. With such hikes, the gap between salaries offered by fledgling startups and established companies is shrinking.

The news report by the financial daily reads, some 82% of startups are paying above the market median and are also paying above the 75th percentile for mid-level executives, a Hay Group-Canaan Partners study found last year.

However, Debabrat (Debu) Mishra, director at Hay Group India sounded "These kind of salaries are unsustainable," says Debabrat (Debu) Mishra, director at Hay Group India. "Organisations are riding on VC money and creating an unhealthy environment which will not last for long."

(Image: India Times)