The company is an extremely successful enterprise, being the largest two wheeler manufacturer in the world for 10 years in a row. The success was achieved as a joint venture, which was dissolved recently, but amicably. With benevolent environment and opportunities of growth, managing growth is a challenge. The most critical resource to manage this challenge is human capital. Of late, with sustained high GDP growth in the economy, job opportunities have expanded and talent is increasingly migrating to companies with strong EVP.
One of the objectives amongst several, for redesign of our Compensation & Benefits structure was to become CTC focused rather than basic pay focused, the latter being a vestige of the PSU era. Young talent today is sensitive to the economic gains, while retaining the choice of discovering for themselves, through career moves, which company is good to work for. That is wonderful for people of this country, because unlike in the past, companies now have no choice but to become people focused.
After restructuring our compensation and benefit structure, we converted certain facilities into cash components. A major one being company car. It is only fair that an employee is able to encash a facility, which he/she does not wish to avail and therefore, has flexibility to structure one’s rewards as per one’s own preference.
Two major components that are non-cash in our system are retirals and insurance; gratuity, PF and super annuation being the heads under retirals.
We give several varieties of insurances. Some of these being Group Life Insurance, Group Personal Accident Insurance, House Hold Insurance, Medical Insurance, etc. We are a benchmark on these. Our philosophy being that given the state of social security in India, organizations have to stretch out and provide these. Also, given the inherent efficiency of these provisions by a large employer, it works for the employee as for the employer. It takes a while for employees to begin to value this provision, but once the impact of such benefits are realized, the employee begins to value them and develops an extremely favorable view of the company as a fair and engaging employer, reinforcing the psychological contract that he/she has with the company. Whereas, the economic contract is certainly helpful in attracting talent, it is the psychological contract that results in retention of talent.
In short, the twin objective of attracting and retaining talent was achieved through Compensation and Benefits redesign. Various ambiguous allowances were merged into basic pay, thereby enhancing the value of retirals and enabling potential employees to transparently assess the economic succor. Additionally, the fact that this favorably impacts retirals and we have also enhanced variety of insurances, which are a benchmark in the industry, has resulted in reinforcing the psychological contract that the employee has with the company. One sees us as a fair and caring employer and our retention of talent is an industry benchmark.