Over-compensated to death

Over-compensated to death

By Rajesh Setty on Fri 25 Aug 2006, 5:57 AM – 17 Comments

I am currently in Bangalore meeting with software folks of all levels of experience – from fresh graduates to people who have returned from abroad with years of experience.

As I observe and consume all the data that I am gathering, on one side I am happy to see that the place is bubbling with enthusiasm but on the other side I am disappointed about what this is doing to young software engineers. Let me focus on the second part. Here is some background.

What gets offshored in a big way is commodity stuff. So there are lots of people working on commodity stuff. Case in point: I talked to an young software engineer working on a project for a large chain store in the United States. I talked to her about her project and while she was very passionate about the project – she was maintaining the email campaign management system that the chain store was using. That was on the positive side. On the negative side, she had no clue about the “customer.” She thought that the chain store had 4 stores but in reality, the chain store has more than 1000 stores across the United States. She had a great understanding of the email campaign management system but she had no idea of the end-to-end application and its business impact. She had been working on this for more than a year. That was sad. Of course, when we talked about her compensation, there was a pleasant(?) surprise. I thougt she was way over-compensated for the kind of job that she was doing. After a quick coaching session, she got what the “real” problem was.

The over-compensation was a slow poison. The company was happy to retain her and over-compensating was the quickest way to do that. In this case, the compensation was such that it would be very hard for her to take a job where she will have the opportunity to work on cutting edge technologies but with a lower compensation. She will get a feeling that she is “sacrificing” something (money) to go after her dreams. In reality, she is not “sacrificing” anything – she is infact escaping from the hand-cuffs imposed by the over-compensation.

How about you? Is your current compensation holding you back from making the right decisions?

Something to think about over this weekend.


Related Articles:

Posted in the Main Page category.

SocialTwist Tell-a-Friend   

17 Comments so far, Add Yours

Anonymous  on August 25th, 2006

Hi Rajesh,

To say you true, i live in France, i am married, i have a daughter and my current compensation holds me back from making others decisions. Today, the life is more and more difficult and more and more expensive. The question is : are you ready to risk your current commodity to achieve your dream?

PS : I have just received my book (beyond code). I am impatient to read you!

Anonymous  on August 25th, 2006

Finally! Someone sees it like I do. I am rather worried about the lack of progress these young engineers will make in their lives, despite their aptitude and intelligence. Worse still is the case of those over-compensated engineers who prefer to work in call centers as soon as they are out of college. What will become of them? They won’t even have had a chance to apply their skills. Think about it, in their late 20s or early 30s, with families, what is their future?

Anonymous  on August 25th, 2006

Excellent point Rajesh. Only this is not just happening in Bangalore, the same behaviour occurs everywhere. It takes an enormous amount of courage to break free of the golden handcuffs to pursue a passion or to scratch the entrepreneurial itch. Once we become grownups, with a spouse, kids and a mortgage, it is even harder.

The positive spin to this is that when we are ready to go for it (whatever “it” might be), there is built in pressure to be adequately prepared.

Anonymous  on August 25th, 2006


This is an excellent observation. Unfortunately, current generation is caught between money vs internal desire. To start with a job which gives a decent money, they lock their career aspirations and long term goals. You may also find another syndrome – working for a large company (doing a mundane job) Vs small company (desire job). However, the society respects the person who works for bigger company, not the type of job one performs. I wish that there are many more risk takers and we see tremendous growth of entreprenurs in the coming days. Certainly interaction with you (Lucky Bangalorians), might have turned few youngsters to entreprenurship. Thats the great service / contribution by you to the society.

Thank you


Anonymous  on August 25th, 2006


I’ve been reading your site for a while and I very strongly identify with the person you are describing. I used to be a big 5 consultant here in the US but after nearly two years I lost a lot of confidence in my level of knowledge and skillset. I knew this would continue to the point where my only recourse would be to go into management earlier than I would have liked and possibly be a less qualified manager when it eventually happened.

I realized how overcompensated I was when I started looking for other jobs and realized I was probably making at least $20K more than my skillset was worth.

To fix this situation, I decided to leave permanent work and go into contracting to build my skillset. This would allow me to retain my earning power without compromising on my skillset Now after nearly one year as a contractor, I feel much more confident in my worth in the job market and with my skillset as a developer. I think if I were to apply for permanent work now, I would be much closer to my big 5 consulting salary while still doing the work that I enjoy. I wanted to offer this advice to your readers. Thanks for a great blog.


Karthik Hariharan


Anonymous  on August 25th, 2006


Excellent perspective on a subject that ‘offshore’ employees need to reflect on. The feeling of being over-compensated needs to be weighed against various other factors: flexibility to change, priorities, values, etc.

As you mention, the real culprits are the employers who fail to help employees understand context and perspective. The proactive amongst these employees can tap into resources/media to make a special effort to learn more than just what their routines involve.

Sooner or later, employees you describe find work to be routine and feel their work does not challenge them. They blame their positions for their dissatisfaction.

As I explained on my blog, they fail to realize and capitalize on the various opportunities that their current positions present. If they feel they are over-compensated, they can seek to expand their responsibilities.



Anonymous  on August 27th, 2006

Thanks Nabil.

Once you read the book, please send me a note with your comments and feedback. Look forward to it.

I lived in France – Paris and Grenoble late 90s and we both (Kavitha and myself) enjoyed our stay there very much.



Anonymous  on August 27th, 2006

Manisha, David, Karthik, Rajaguru and Nagesh and all those who sent me emails on this topic

(Unfortunately I am not able to respond to emails individually while I am in India – traveling extensively to meet people – hence spotty on my blog)

Thank you for all your comments. As I spend more time in Bangalore and reading all of your emails the problem is more complicated than I originally outlined. Not only there is over-compensation problem, there is also a problem of pre-mature promotions to hang on to talent. Hopefully we will come out of it unscathed. But I doubt it.



Anonymous  on August 27th, 2006

I think about this in two ways (1) These highly paid jobs can act as a barrier to entry to pursue your passion in the life as described in the post (2) If you use it correctly, learn and save, it removes the barrier to entry to pursue your passion. But I agree that the percentage of candidates in (2) is very less.

Anonymous  on August 27th, 2006

That is a very good point Sudaakeran. I have met a few people who are currently working at a call center but using the extra money to further their studies and later hope to get a better job. So that is definitely a possibility.

However, as you rightly said, I am sure the folks that will put in that kind of discipline will be a minority.



Anonymous  on August 28th, 2006

I totally agree with you Rajesh.

Thanks for that perspective. A lot of people say that money is not that important. But when push comes to shove, most of the time one would choose the better paying, less challenging job.

I believe the issue is more than meets the eye.

(1) We live in a society of instant gratification. Fast food, instant weight loss, automatic this & that, etc. A shorcut is not necessarily good all the time.

(2) Most people measure success by how much money one earns, sometimes even when not deserved. Our world has become too commercial, for my liking.

(3) We have forgotten about the simple pleasures in life, particularly those that we don’t need to spend a single cent.

Thanks for such a great post!

Anonymous  on August 28th, 2006

This was true of even the Silicon Valley during the boom days, when grads walked out with 3 offer letters, had no experience. The lesson we can quickly learn in India is how the U.S. market is still recovering from the bust days: Ivy League grads were left without jobs and the market re-adjusted their salaries to experience in blazing speed.

But of course, experience is always the best teacher. While India could gain to be the most prominent player in the IT services field, we have a long way to go… and short-sighted issues like high salaries for the wrong reasons, losing focus on the customers’ customers, and putting ego before execution are sure roads to self-destruction.

You raise a valid point, Rajesh.

Anonymous  on August 30th, 2006

Is there a number where i can reach you while you are in bangalore?

Anonymous  on September 2nd, 2006


Compensation of an employee is based upon several factors. This includes attributes of the employee such as merit that encompasses education, experience, talent, ability to execute and the potential to perform. However there are environmental factors that also determine compensation, such as market forces and competition in an industry that establishes the “value” of an individual to an organization. When a change happens in an industry, the same market forces, that overcompensated the individual will realign to competitive pressures and readjust the compensation – more so to ensure its own success or survival amidst competitive pressures. Look at what happened to shop floor workers of the developed world. This is exactly what led to outsourcing to countries with lesser labor or production costs such as China and India. In such a situation, the overcompensated individual is forced to change. The consequence of such a change can be usually good for the employee forcing them to enhance their skills and seek opportunities to maintain their levels of compensations or even enhance their levels of compensation. On the flip side if they do not accept the change, they may be doomed to accept lower salaries, much like companies that are forced to adopt change to continue being profitable or perish if they do not because of competitive pressures.


Anonymous  on September 6th, 2006

How about subduing the passions themselves? ;)

Anand Bajaj  on January 2nd, 2010

Dear Setty,

Its beginning of a new year, and this post holds its message strong in this decade as well. Such situation exists more in Gulf region. All those who come here to make quick buck for short span end up merely living for their life time.

Well, I am one of those victims of Gulf Virus and start to realize the effect of Over Compensation. I find myself in catch-22 situation and hope to get away while maintaining balance.

Rajesh Setty  on January 2nd, 2010


Having lived in a few countries, I can say that the catch-22 situation exists almost everywhere. All that it takes is to be slightly “over-compensated” in the near-term and you can get into a serious mess in the long-term.

Wish you the very best with your situation.

Noticing this problem is the start of solving it.

Good luck.



Leave a Comment