Sunday, April 02, 2006

The truth behind IIM MBA Salaries and More Media Bashing

Disclaimer: I may remove/edit this post if it causes unintended damage to people concerned. This is written on my own voilition and I am not writing at someone else's request.
As long as I am on the topic, let me engage in further media bashing. Now whats with the obsession about salaries of IIM graduates? "Record salary" "Highest international salary converted to indian rupees" "Highest domestic salary". They've started ranking salaries like it is some sort of a Superhit Muqabla show.

Take the news reporting on this year's IIM-Bangalore salaries for instance. I have been caught up in my own internship search that I did not notice the papers for the past 3 months. Two student's names have been pasted on every newspaper for getting highest international salary and highest domestic salary. One of the two names mentioned is a pretty close friend of mine. Many times, we have stayed up all night to argue on topics similar to the previously blogged about indecency of Indians to talk about salaries. Knowing him very well, I was not completely surprised when I saw this news.

The Times of India reporter is surprised that someone else can use their fundametal rights also. They have so far been touting "freedom of speech" to publish crap and now they are peeved that someone has the gall to think that the media is immature and shouldnt be trusted with this sort of information.

I got into a conversation/argument with a friend on this "differences in salaries" for 2 IIM students who are essentially joining the same firm (the 2 names mentioned above werent the only ones to get offers from the respective employers). Is it possible for the same firm to give 13 lacs per annum for one person and 30 lacs per annum for another person? We did some sort of analysis on why this was so and I'll share that in the hope that Blogs will probably serve as an alternate means to reach public. Ofcourse all this is my personal analysis and I have not consulted the IIM students mentioned above.
Management Consulting (MC) firms and Investment Banks (IB) recruit 2 kinds of people.

a) Analysts - who are typically people with undergraduate degrees and join the firm in starting level positions.

b) Associates - These are people with graduate degree like an MBA. Associates are 2-3 rungs above analysts in the firm heirarchy and Analysts typically require an MBA to advance to and beyond Associate positions.



Usually MBAs who join MC or IB have some sort of work experience before MBA and so they are recruited for "Associate" level positions. MBAs from IIM are usually considred different from other MBAs. Mainly because they don't normally have the requisite work-experience before MBA. So even though they have a graduate degree, they are recruited as an Analyst or a position that is 1-level above an analyst. While MBAs from other regular "feeder schools" would be 'Associates' - IIM MBAs may not always be Associates.

The 2 people mentioned in the newspapers (link provided above) are people with a graduate degree in the US and 2-3 years of experience in India/US. They are not representative of the general MBA population in IIMs. They might have got "Associate" level offers, which is the reason why their salary is remarkably different from another dude who got an offer from the same firm. Their salary (and their case) may not be typical and may not be representative of the general salary trends in IIMs. This information ofcourse has been conveniently eliminated by the media.

The other factor is the Base Salary + Bonus. The bonus is split into two parts (a) Real Bonus (b) Media Imagined Bonus. Yes! You read me right. The real bonus - for example - The salary reported for Gaurav Agarwal includes all sorts of bonuses he will/may get at the end of the year. This ofcourse depends on the economy and the bank's profits. The "imaginary bonus" is media creation to inflate the salary to an abnormal number. For example, one of the reported salaries is not what the person will get at all - even if you include bonus, tips, charity money, inheritance money etc. He says the number is a figment of media imagination and does not exist in reality. So there is news reporting for you.

The above argument could be considered moot when you ponder whether media has any business interfering in somebody's private information such as salary. Whats the point of flashing this news? What will this acheive? Perverse pleasure of knowing someone else's salary? This boils down to "lights on Sunil" we read in Kumudham or the "Thunukku Mootai" that comes in Vaara Malar. Cheap movie gossip that we know is false but is entertaining anyways. Not that such cheap entertainment is bad morally (I am not into such crap), I read those all the time. But just that it is not what is expected when you are talking serious news reporting (This is ofcourse my subjective opinion).

The logic that amazes me on this whole issue is that - it takes two people who have enough contempt for this bad habit to point to to IIM directors and Times of India that reporting 'news' related to a person's salary is really offensive and invasion of privacy. The IIM Directors and the main stream media couldn't figure this out on their own. They needed some one to tell them to stop the nonsense.

25 comments:

? (You Know me) said...

Dei B,

Is Venkatesh Sankarararaman the dude who was nicknamed PK in our Ohio State junta. Kalakitaan.

You also did not mention the Dina Malar and Dina Thanthi flashing +2 students marks and photos. What does that serve?

Anonymous said...

Bharath,
Have you landed an Internship? If so, Can you tell us which company? How easy was it is to find an Internship given your F-1 Visa? Are you concentrating on a particular function (Marketing etc.)in your MBA?

Hawkeye said...

anonymous,

send me a pvt email.

? (you Know me)

:-) send me a private email.

Suresh Ramani said...

Hawkeyeview,

Even though you have every right to bash the media, I think you may be giving them a lot more dis-credit than what they deserve.

Media is doing what its doing only because there is an audience, a subsequently large one that, which it sells into. I mean, lets face it, if the public is largely dissatisfied by what the media is dishing out, then all of these guys should have been out of business by now. But, in fact they are thriving, which only means, there is an audience for all this crap.

Now, one could say that media has the responsibility to the society to ensure quality journalism, but ultimately, it boils down to their bottom-line - how much money they can make with the least amount of expertise.

If you think that there is a considerable majority of people who think the same way as you do, then the media has failed to identify a business oppurtunity, but I seriously doubt it. I think I have said this before in your comments section - unfortunately, we form the minority in this case and no one is going to cater to our needs unless we pull in more weight, financially.

Hawkeye said...

suresh,

I have tried to work out the logic of this several times. we may have even argued about this as part of our 8 Billion arguments. Its a chicken and egg problem.

Lets say, I actually dont want to change anything and I am satisfied with merely complaining and stopping at that. But does the public have a choice? The Hindu sells and regardless of other flaws that it has, it is much less tabloidish than TOI. Is this indicative of a particular market niche already captured so TOI is trying a different segment.

Its like the eternal debate of whether navel dances are shown because people like me want to see it or people like me see it because navel dances are shown the most. Now I cant see a movie with no navel dance. Will the same analogy happen in the newspaper case.

who is the trendsetter/leader is the confusing part. that is why it is possible to make a case for such media behavior.

but the point of this post was spreading incorrect information and invading someone else's privacy to sell your business. Its like the old case of capturing naked trisha video illegally and selling that video. Superb revenue opportunity but illegal.

hema said...

Hawkeye,

Agree with you completely on bashing the media, though i am not too sure if your posts will change anything. It was quite shocking to see the way reporters stoop to reveal someone's salary or marks etc. All in all disgusting. Is there a organisation where we can represent our views on stopping this big brother issues....hmm...worth considering i guess.

Anonymous said...

dei ?..where are u know..send me an email..b/b please call when u get a chance da...never seem to be able to get hold of ya

Anonymous said...

Anonymous =stan

? said...
This comment has been removed by a blog administrator.
Anonymous said...

"Not that such cheap entertainment is bad morally (I am not into such crap)"

On what basis is the entertainment being called cheap if not on a moral ground?

Hawkeye said...

my bad english explained: The entertainment could be cheap on moral grounds also! but i am not into giving morality lecture.

Hawkeye said...

anonymous friend from OSU,

i deleted the comment on stingyness etc. send me an email

Anonymous said...

I am assuming that you have problems only with revealing the names of the student. Salaries ofcourse can be published.

The act(publishing name) itself is not surprising.
But it is good that your friend atleast ensured or made an attempt to let his displeasure known!

Anukris

Hawkeye said...

anukris,

u r spot on. everybody discloses mean median salary etc. its the name publishing (along with address phone number resume etc) which is really bad

Anupadmaja said...

Anu,

Unless or until it is Julia Roberts - the highest paid actress - dont know for what though ;)

I think stardom alone enjoys the right to stamp on any law, moral ground or person :) We saw the evil of stardom move smoothly into sports. Now its making its way into work life in India too.

Hawkeye said...

I think if you earn beyond a particular number or if you are top management of a company, you maybe required by law to make it public ( i am not really sure about this law but i think something similar exists)

Hema said...

Hi,

It was a great coincidence, last night in BBC there was a documentary about the emerging trend on web blogs and the supposed way it would lead to a decline in publishing industry etc. One of the main topics discussed was about the false hype created by the media by prying on salaries, education levels etc...thought of your blog immediately. Infact i was doing a bit of "spread of mouth" of your blog with my friends...so u may get many more anonymous :)from now on

terrywhatlee said...
This comment has been removed by a blog administrator.
terrywhatlee said...

Commenting on:

> I am assuming that you have problems only with revealing the names of the student. Salaries ofcourse can be published.

>> u r spot on

Statistics are more powerful if they have faces. The salary offers constituted what is good fortune for the 2 guys. Consider the opposite. Misfortune.

Say, a news article as with the heading: "25 Injured, Lorry Plows into Crowd". Would you, as reader, like the names of the 25 people to be printed?

If you say No, is this because you are afraid how giving a face to an (unfortunate) statistic will affect you?

If you say Yes and qualify it that if the 25 injured agree to have their names published, then you too are OK with it, then if the 2 guys had been asked and agreed to have their names published, then is it OK?

Just rhetoric, this...

Bharath said...

Hear this.. ISB student breaks IIM salary record.

http://www.ibnlive.com/article.php?id=7784§ion_id=3

well, well..

Anonymous said...

Why will media hype or include imaginary figure in the salary? How much can they bloat that figure?

The fact is IIMs give out these figures to media. Then why blame the media?
IIMs have PR agencies and it is these agencies who create all the hype in the media. And IIMs like these news too.

Hawkeye said...

anonymous,

you have answered your question in your comment itself :-)

Tina said...

Common admission test for MBA by IIM
you have nice blog

Anonymous said...

IIM MBA CAT

prasadsubra said...

The truth is we are consumers.
The media along with the riches deplete the people with unwanted things.
The much hyped MBA is also one of them.
It just striked me this afternoon, how foolish was I?
I already knew that whatever I see or hear or receive in this world, necessarily means business for somebody.
Poor me, spent like few months desiring an MBA from top university. Thankfully woke up from it.

And I am not ready to quit my 4lakh per annum, study for CAT like a donkey for two years and then do the MBA for two years again spending around 20-35 Lakhs(abroad or here in india) and then finally find a less interesting job for 7 lakh per annum(most likely).
If I stay in my current job for two years I would reach 6 Lacs PA easily.
I don’t want to debt myself for another 20 years, which would be ultimate foolishness.
Shit, I cant imagine how I bought this MBA thing.

I can better invest that 20 lakh or less in a business. I am sure if i could be eligible for an MBA in top university, I can do a little business without a big flop.