Firstly that's a question everyone getting hired has in mind but very few have the curiosity to know about . It was a question I came up with after passing a quarter of my employment with an MNC & then I got few points , few facts and few legal frameworks that sum up the compensation policies of such companies .
There are a few bullets to sum it up :
- India Being a developing economy attracts ITES , KPOs and Analytics companies for 1 sole reason - it's reasonable quality workforce in return for reasonable compensation meeting their requirement when it comes to skilled and semi skilled job requirements.
- Most of the MNC establishments are categorized under different sectors and thus are governed by different labor laws for Example : The minimum hourly wages are decided as per shops and establishment act of the respective states and it differs a lot ....trust me.
- We don't have a legally organised framework as a nation imposing with any mandatory compensation structure to devise for different or for similar nature jobs like if you are working as an analyst in the entry level position you basic component of salary might vary for two different cities for same company or same work at same level within the same company .
- Most of the Indian MNC's have a confidential non disclosure policy when it comes to discussion of compensation within the organization , so as to avoid confrontations and it has been the way since it all started.
- For government jobs we have pay commissions being enacted to decide the compensation structure but for MNC orgs no private payment or wage commissions have been formed or asked for yet .......
- Psychological Reasons - A. India is a cheap workforce Market B. Package Offered is directly proportional to your abilities & (league of campus you are from or companies you were working with...might be startup or small firm but the work would be better still they judge and associate you with it)
- This reason is more of observational than factual " I guess people are compensated well if the work is Innovative and Creative but are compensated reasonable when the work is repetitive".
- Different Salary formats being used results in ambiguities a lot of times , also CTC is a term which is used as a jargon in most of these low compensating positions so actual take home post all deductions should be considered while accepting an offer.
Just a thought.
Got More Reasons , add more.......