Watch out: B-schools apparently inflating salary figures

Many B-schools in India’s top 20 list have reportedly been inflating salary and stipend figures for summer and final placements as institutes want to keep rankings intact.

Clubbing international and domestic salaries together to calculate the single average salary figure is one of the few tricks that B-schools use to inflate their placement data and improve their marketability. In several cases,when students receive multiple job offers, all the salary figures are added up to increase the average salary figures.

The Business Standard today quotedPremchand Palety, director of Centre for Forecasting and Research (C-fore) in New Delhi, which does an annual survey of B-Schools, as saying that figures quoted by over half the B-schools in India are highly exaggerated.

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“Some B-schools quote salary figures of Rs 1 crore, which is actually a foreign placement figure and is effectively about Rs 15 lakh per annum if purchasing power parity is factored in,” Palety told BS.

So basically, the highest salary figure is a dollar-denominated figure which is then converted into rupees but they do not normalise the purchasing power parity in different countries during the conversion.

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Obviously, the two cannot be compared since the dollar salary will not be earned in India but in another country where the cost of living is what higher.

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Also, B-schools do not mention the bonus amount which is contingent on performance i.e, performance-linked bonus. So when allsalaries offered to students are inflated by taking into account the CTC (cost to company), which includes variable components (bonus), the average salary is bound to look attractive.

Palatey further told BS that some B-schools claim 100 percent placements and even international placements, when the truth is that hardly 50 percent are placed on-campus and that too, mostly as entry level salesmen. ( Read the full story here).

So why do B-schools do this?

Salary package for most aspiring MBA students is the most perceptible parameter to judge the quality of a job offer and by showing inflated figures B-schools can attract better quality students, sell more forms and gain a few notches above a rival school. Moreover, it even helps attract higher paying companies for the next batch of placements.

Obviously, the two cannot be compared since the dollar salary will not be earned in India but in another country where the cost of living is what higher.

So next time you are looking to join a B-school, dig a little deeper and ask the right questions. Don’t be swayed by the salary offers and figures for data can be misleading.

No takers forIndian Placement Reporting Standards

In order to bring more transparency into b-school placement reportage, Indian Institute of Management - Ahmedabad (IIMA) had in 2011 introduced the Indian Placement Reporting Standards (IPRS). It is a framework that aims at standardisation of placement reports to make them more transparent and easy to understand, more comparable and reliable for making decisions.

The aggregate statistics to be published include minimum, maximum, median and average salaries across every parameter, so that:

* B-school employment reports are used in a fair and accurate manner to attract students and employers.

* B-school aspirants can make a well informed choice, thereby resulting in more realistic expectations on their part when they join a B-school.

* The standards require that placement data be audited by an independent auditor.

However, so far only24 B-schools have joined IPRS while just six B-schools have uploaded their audited placement reports.

This system too has loopholes as B-schools can get away with reporting selective data as IPRS guidelines do not mandate the minimum number of disclosures required for the audit.

Moreover, the IPRS does not stop B-schools from hiving off unplaced students as having ‘opted out of placements’. ( Read more here)