Variation in Giving Importance By Companies W.R.T. Employees

I know two companies A and B. They have few basic differences.

Company A gives maximum importance to their employees. The company thinks that, his employees know a lot, and outside people do not have that much knowledge. When they hire, they always give less salary/designation to outside employees when compared to the people of the same experience in the company.

Company B gives equal importance to everyone. They decide the salary/designation based on their perceived value that company gets from the employee. If the candidate performs extra ordinarily in the interview, the new hires may get better salary/designation than the people who are in the company with the same experience.

Initially, I thought company A is arrogant, and all companies should be like company B. Later on, I realized that, it may not be correct.

I have seen employees of B, who were paid less than many other people who were hired with the same experience. The reason they give is, this employee has not been performing well, and the new person has good knowledge. So, they were offering better salary/designation than the current employee. But, if they conduct the interview and ask the same questions to both, they would perform almost equally. For the new hire, they can test only for 4-5 hours, and they try to get the information only on the most important points. Where as for the existing employee, they have been testing for a long time, so, they know all the negative points, and most of the time, the negative points dominate positive points.

I heard many employees of Company B saying that, since they are not getting promotion, they would leave the company, and after 2 years, they will come back at two levels higher. If the company is going to give 2 levels higher, after working outside the company for 2 years, there is nothing more that destroys the company. They are encouraging the people to move out, and come back after some time. This is not good for the company.

That's when I understood the advantages of Company A's policies eventhough from outside, it looks like they are arrogant. They always encourage people to stay longer in the company. If the employee stays for long time in the company, there is more advantage to the company.