5 THE RELATIONSHIP BETWEEN WORK EXPERIENCE AND EMPLOYEE COMPENSATION: A CASE STUDY OF THE INDIAN IT INDUSTRY Mihir Dash, Professor Suprabha Bakshi, MBA, Research Assistant School of Business, Alliance University, India Aarushi Chugh, MBA, Business Analyst Tata Consultancy Services, India Introduction Prospective employees often aspire for compensation based on their perception of their knowledge, their skills, and their relevant work experience. On the other hand, potential employers look for experienced candidates since they consider the candidate’s work experience to be an indicator of the candidate’s proven performance in a similar role or in a similar industry. Thus, work experience is not only a decisive factor for securing a job offer; it is also a key factor for determining initial compensation, and influencing salary increments and promotions. Compensation is the foremost consideration for any employee as it provides the employee with significant rewards such as a sense of appreciation and monetary benefits for the contribution that he/she makes in the organization. Compensation is a key motivational factor for employees. Employees seek jobs that not only match their talent and unleash their creative side, but also compensate them suitably in terms of salary and other benefits. Compensation for employees takes into consideration all forms of salary and rewards received by an employee for performing on the job. Employee compensation is much more than just the direct monetary amount that organizations pay for employees. A multitude of factors influence the employee compensation. Employee- associated factors that can influence compensation include work experience, seniority in position, and performance at work. Work experience can influence compensation because past know-how in the field supplements value addition in the system, and therefore it is compensated appropriately. Organizations often require experienced candidates in higher level positions as they believe that such candidates will be not only prove to be a ‘suitable work fit,’ but will also bring in with them the leadership acumen which will positively influence the behaviour and performance of work teams. In addition, experienced candidates will be able to perform suitably on the job with little or no training which otherwise could have been a time-consuming and costly proposition for any organization. Compensating employees is a subtle equilibrium amidst meeting the expectations of the employees and the organizations financials. Employee compensation is generally based on a number of factors. Two of the most important factors are education and work experience. Most employers also consider the attitudes, specialised skills, and knowledge of the employee when fixing the employee’s salary. When salaries are based primarily on educational qualifications, employers are usually looking for a set of core skills that would be difficult to pick up outside of a narrow field of academic study. In fact, many employers won't even consider an applicant with no higher education at all, no matter how much work experience she/he