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Comparative Analysis of Compesation Structure of HPC Ltd. vis-a-vis Other Companies of Same Industry

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Comparative Analysis of Compesation Structure of HPC Ltd. vis-a-vis Other Companies of Same Industry

Comparative Analysis of Compesation Structure of HPC Ltd. vis-a-vis Other Companies of Same Industry

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  • 1. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A REPORT ON COMPARATIVE ANALYSIS OF COMPENSATION STRUCTURES OF HPC Ltd. viz-a-viz OTHER COMPANIES FROM PAPER INDUSTRY By Richa Ranjan (09BS0001880) HINDUSTAN PAPER CORPORATION LIMITED 1|Page
  • 2. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A REPORT ON COMPARATIVE ANALYSIS OF COMPENSATION STRUCTURES OF HPC Ltd. viz-a-viz OTHER COMPANIES FROM PAPER INDUSTRY By RICHA RANJAN 09BS0001880 HINDUSTAN PAPER CORPORATION LIMITED A report submitted in partial fulfillment of the requirements of MBA Program of The ICFAI University, Dehradun Date of Submission:14/05/2010 2|Page
  • 3. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Authorization I, Richa Ranjan (Roll Number- 09BS0001880), (2009-2011) do hereby declare that this project entitled “Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry” submitted to HINDUSTAN PAPER CORPORATION LIMITED, 75-C PARK STREET, KOLKATA- 700091, is a bona-fide record of research work done by me, in partial fulfillment of the requirements of MBA Program of ICFAI University, Dehradun and has not been published anywhere else prior to this. i|Page
  • 4. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Acknowledgements The Summer Internship Project with Hindustan Paper Corporation Limited, Kolkata during the 14-weeks period has been of immense importance to my learning process. The project is an outcome of the support and encouragement provided by a number of people who contributed their thoughts, expertise and insights towards the successful completion of this project. Firstly, I would like to express my deep gratitude to Hindustan Paper Corporation Ltd. for giving me this valuable opportunity to work on a project of the company. I am grateful to Mr.Cherian Thomas , Head (HR Dept.) for giving me permission to do this project in his department. I would like to thanks my Company guide Mr.Govind Kumar, Senior Manager (HR & ES Department) HPC Ltd. and Faculty guide Dr. Rachana Chattopadhayay IBS Kolkata, who have always supported me. I would like to extend a deep sense of gratitude to my two more guides Mr. D.P.Satpathy, Manager (HR & ES Department) and Mr. P.K.Adithian, Senior Executive P.S(HR & ES Department) for their guidance and suggestions because without them this project wouldn’t have been possible. Last but not the least a special & heartfelt thanks to my friends and family members for being a constant source of support. This guidance, support and co-operation is not only useful for this project only but will be grate constant source of inspiration for me in the future life. ii | P a g e
  • 5. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Abstract This study attempts to explore the different compensation structures in different firms of same industry (the industry in question is Paper Industry). This study also helps us to evaluate the effectiveness of Collective Bargaining in different firms for setting up compensation for their workmen. This project aims to do a comparative analysis of Compensation Management/ Structure for HPC Ltd. with its counterparts in the same industry, as to draw inferences about the best practices adopted by HPC Ltd. and other similarly placed companies and to find out the following hypothesis:- Ho : “Will HPC Ltd. be able to sustain with this Salary& Wages Structure viz-a-viz Production realization and number of Employees in the present scenario.” For this Analysis firstly, I have done proper study on compensation management and then the compensation structure of HPC Ltd. i.e. revised pay structure effective 1.1.2007, compensation policies and organizational structure etc. To arrive at conclusion the similar kind of study have done for other two companies also i.e. Mysore Paper Mills Ltd. and Tamil Nadu Newsprint and Paper Ltd. With the help of secondary data what HPC Ltd. and other companies provided, I came to know that the Methodology/structure used to set up their compensation is “Graded Pay Structure”. HPC Ltd. has more vertical structure as compare to other two companies. Percentage (%) to salary & wages to turnover is very high, approximately 19% (2008-09) in case of HPC Ltd. which should be ideally (7-11)%. Employee Cost/tonne is also high and increasing day by day. Though HPC Ltd. is paying good salary to its employees/workers as compare to other companies but it has to take some sincere steps to limit ‘Percentage to salary & wages to turnover’ to less than 10% and to lower down ‘Employee cost/tonne’. iii | P a g e
  • 6. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Table Of Contents Authorization ................................................................................................................................... i Acknowledgements......................................................................................................................... ii Abstract ........................................................................................................................................... iii INTRODUCTION ....................................................................................................................................... 1 1. Compensation Management ........................................................................................................ 1 1.1. Components of Compensation System..........................................................................................................1 1.2. Types of Compensation .........................................................................................................................................1 1.3. Need of Compensation Management .............................................................................................................2 2. Setting Up-Compensation Structure............................................................................................. 3 2.1. Executive compensation .............................................................................................................................................4 2.2. Worker’s compensation ..............................................................................................................................................5 3. Collective Bargaining.................................................................................................................... 6 4. Different Pay structures ............................................................................................................... 8 4.1. Criteria for pay structures..........................................................................................................................................8 5. Scope of the Project ..................................................................................................................... 9 6. Methodology ............................................................................................................................... 9 7. Limitations ................................................................................................................................... 9 Background of the company .................................................................................................................. 11 1. Mission Of HPC .......................................................................................................................... 12 2. Product portfolio of HPC Ltd. ..................................................................................................... 13 3. End users ................................................................................................................................... 13 4. Projects...................................................................................................................................... 14 5. Performance & Achievements of the company .......................................................................... 14 5.1. Physical (during last 3 years )...............................................................................................................................14 5.2. Financial(during last 3 years) ...............................................................................................................................15 5.3.The other Achievements to name a few are-.................................................................................................15 Compensation set-up in HPC Ltd............................................................................................................ 16 1. For Executive- Revised Scales of Pay (2007 pay structure) .............................................................. 16 2. Negotiation through Collective Bargaining in HPC ltd. .................................................................... 24 3. For Workmen-Revised Scale of Pay (2007 pay structure)/ Wage Grades......................................... 25 iv | P a g e
  • 7. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ About Competitor ................................................................................................................................. 34 1. Mysore Paper Mills Limited ........................................................................................................ 34 1.1. Introduction of the MPM Ltd. ..........................................................................................................................34 1.2. Compensation Setup in Mysore Paper Mills Ltd. ..................................................................................35 2. Tamil Nadu Newsprints and Paper Limited ................................................................................. 41 2.1 Introduction of TNPL .................................................................................................................................................41 2.2. Compensation Setup in Tamil Nadu Newsprint and Paper Mills Ltd. ............................................ 42 Comparative Analysis ............................................................................................................................ 47 1. For Workmen............................................................................................................................. 47 2. For Executive ............................................................................................................................. 56 3. Percentage (%) of salary & wages to turnover ............................................................................ 61 4. Employee Cost Per Tonne .......................................................................................................... 64 Conclusion............................................................................................................................................. 67 Recommendations ................................................................................................................................ 68 Bibliography .......................................................................................................................................... 69 List of Illustrations Figure 1:% Range of each grade for workmen in HPC ltd. ....................................................................... 47 Figure 2: %Range of each grade for workmen in Mysore Paper Mills Ltd. ............................................... 48 Figure 3:%Range of each grade for workmen in Tamil Nadu Newsprints and Paper Ltd. ......................... 49 Figure 4: For TNPL ................................................................................................................................. 61 Figure 5: For MPM ltd. ........................................................................................................................... 62 Figure 6: HPC Ltd. .................................................................................................................................. 62 Figure 7 ................................................................................................................................................. 64 Figure 8 ................................................................................................................................................. 65 Figure 9 ................................................................................................................................................. 65 Table 1: % range in basic pay of HPC ltd. ................................................................................................ 47 Table 2 : % range in basic pay of MPM Ltd. ............................................................................................ 48 Table 3: % range in basic pay of TNPL .................................................................................................... 49 Table 4: for TNPL ................................................................................................................................... 64 Table 5: for MPM ltd.............................................................................................................................. 64 Table 6: for HPC Ltd. .............................................................................................................................. 65 Appendice-1 v|Page
  • 8. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ INTRODUCTION 1. Compensation Management Compensation Management is an integral part of human resource management which helps in motivating, retaining the employees and improving organizational effectiveness. Compensation is the remuneration received by an employee in return for his/her services to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees. 1.1. Components of Compensation System Compensation systems are designed keeping in minds the strategic goals and business objectives. Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities. Components of a compensation system are as follows: 1.2. Types of Compensation Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, 1|Page
  • 9. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ etc. Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered is effectively managed, it contributes to high organizational productivity. 1.3. Need of Compensation Management  A good compensation package is important to motivate the employees to increase the organizational productivity.  Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.  Salary is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the purpose.  The most competitive compensation will help the organization to attract and retain the best talent. The compensation package should be as per industry standards. 2|Page
  • 10. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2. Setting Up-Compensation Structure Although money isn't everything, it certainly is one of the top issues potential employees look at when interviewing new companies. Whether a company offering a straight basic salary structure or an incentive-based pay structure may make or break you in the eyes of top job candidates. Let's look at how each system works. A standard base pay program offers fixed salary ranges for each position type for employees performing the standard duties of their jobs. Set up minimum and maximum levels within those pay ranges to account for variations in experience and skill levels. When setting the base pay structure, determine where your company falls within your own industry as well as competing industries that may also offer job opportunities for your employees. Set up your pay levels to be competitive, or else you risk losing employees. Once your base pay structure is in place, most companies then set up a merit pay program that will take the employee through the salary range for their position at a performance-driven speed. This comes into play when the employee's managers do Annual employee performance reviews. The downside of this is that employees may begin to see it as a given that they will get a salary increase after each evaluation, and it ceases to be a motivation to perform better in their jobs. For this reason, more companies are moving toward more of a “reward-based compensation” style, also called Incentive Compensation. Incentive-based compensation is becoming much more common because of the increased emphasis on performance and competition for talent. This type of compensation structure significantly helps motivate employees to perform well. Hiring bonuses are also frequently used now, even for new college graduates. However, a company might want to tie in a specific time period prior to the employee collecting this bonus for example-: one-half after six months and the 3|Page
  • 11. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ remainder after one year of employment. Otherwise, you could run the risk of the employee departing after that first check, which would defeat your purpose. So the incentive compensation may be beneficial, if a company’s business is in an industry where you really have to compete to get good employees. Setting up an incentive-based compensation program requires the same research into the desired industry as the base pay program. Nowadays, most of the companies setup their compensation with combination of Fixed Pay (base pay) and variable pay (incentives, bonuses and other allowances etc). But sometimes there is a difference between in the way of setting up compensation in Private sector companies and in the Public sector companies. Most of the Private companies establish their base pay levels but slightly lower and build into that base the annual or quarterly (or any other interval)incentives, bonuses, commissions, or other types of shared cash compensation. But in the Public sector companies they usually setup large base pay comparatively bonus and allowances given to the employees. Compensation for the employees can be categorized into two- 1)For Executives and supervisors and 2) For Workers. 2.1. Executive compensation Executive compensation is the total remuneration or financial compensation a top executive receives within a corporation. This includes a basic salary, all bonuses, shares, and any other company benefits. Over the past three decades, executive compensation has risen dramatically beyond the rising levels of an average worker's wage. Executive 4|Page
  • 12. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ compensation is an important part of corporate governance, and is often determined by a company's board of directors. (wikipedia) A base salary long-term incentive plans (LTIP) employee benefits perquisites, or perks. 2.2. Worker’s compensation Worker’s compensation has totally different concept from the executive compensation. Other than basic wage workers' compensation includes-: Insurance that provides compensation medical care for employees who are injured in the course of employment. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain." While plans differ between jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance). (wikipedia) Dearness allowance (DA). Shift allowance. Washing allowance (job specific). Location Specific allowance like- Hill Tract allowance [HTA] to the forest staff who work in difficult location of forest. Incentives on acquiring professional qualification for the willing workers. 5|Page
  • 13. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Overtime wages payment. Festival advance and etc [many more benefits and facilities]. Worker’s compensation is not decided by one person or a team it is decided on the mutual understanding of Trade Union and the management which is done through “Collective Bargaining”. 3. Collective Bargaining Collective bargaining is the technique that has been adopted by unions and managements to reconcile their conflicting interest. In organized labor/industrial relations, collective bargaining involves workers organizing together (usually in unions) to meet, discuss, and negotiate upon the work conditions with their employers. Such bargaining normally results in a written contract (collective agreement) setting forth the wages, working hours and other conditions which the parties agree on for a stipulated period. “A collective agreement functions as a labor contract between an employer and one or more unions.” (Mr.P.K.Adithian, 1986) Collective bargaining plays a significant role in improving labour-management relations and in ensuring industrial harmony. The negotiations for collective bargaining requires joint sessions of the representatives of labour and management. Through discussions and interaction, each party learns more about the other, and misunderstandings are often removed. Collective bargaining helps in resolving out many minor differences; and there are many instances in which even major disputes have been settled without any work-stoppage or outside intervention. 6|Page
  • 14. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Mandatory Bargaining Items Wages Severance pay Hours of work Non-discriminatory hiring of all Discharge Plant rules Arbitration Safety Holidays, paid Prohibition against supervisor doing unit work Vacations, paid Super-seniority of union Duration of agreement Stewards Grievance procedure Plant close down and relocation Lay-off plan Job posting procedure Reinstatement of workers Plant reopening Change of payment from Employee physical examination Hourly base to salary base Agreements for negotiation Union security and check-off Change in insurance benefits Work rule Profit shares plan Merit wage increase Over-time pay Work schedule Agency shop Lunch period Sick leave Rest period Employer’s insistence on clause giving arbitration. Pension plans Right to enforce award Retirement age Company house Bonus payment Sub-contracting Price of meals provided by company Discrimination racial Group insurance(health, accident, policies life) Product ceiling imposed by union Seniority Change of employee status to independent contractor Transfer Management strikes clause No strikes clause Cancellation of seniority on relocation of plant Piece rates Contract clause providing for supervisor’s keeping Work load Seniority in units Discount on company products Shift differentials Procedures for income tax with-holding (Murlis) 7|Page
  • 15. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 4. Different Pay structures A pay structure provides a framework within which an organization defines the different levels of pay for job or group of job, on the basis of assessments their relative internal value and of external relativities(market rate). The level of pay in a structure may have been negotiated for all or some categories of employees. The most important types of pay structures are as follows: Graded pay structures. Broad banding structures. Job family structures. 4.1. Criteria for pay structures Pay structures should:  Be appropriate to the characteristics and needs of the organization: its culture, size and complexity; the degree to which it is subjected to change and type and level of people employed;  Be flexible in response to internal and external pressures, especially those related to market rates and skill those related to market rates and skill shortage;  Facilities operational and role flexibility so that employees can be moved around the organization between jobs of slightly different sizes, without the need to reflect that size variation by changing rates of pay;  Give scope for rewarding high-level performance and significant contributions, while still provide appropriate rewards and recognition for effective and reliable ‘core’ employees who form the majority in most organization.  Facilitate rewards for performance and achievement; 8|Page
  • 16. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________  Help to ensure that consistent decision are made on pay in relation to job size, contribution, skill and competence;  Clarify pay opportunities, developmental pathways and career ladders;  Be constructed logically and clearly so that the basic upon which they operate can readily be communicated to employees;  Enable the organization to exercise control over the implementation of pay policies and budgets. 5. Scope of the Project To know about the best practices adopted by the HPC Ltd. and its private & public sector counterparts in their compensation structure. This project also aims to find out the loopholes in the compensation structure of HPC Ltd. by comparative analysis with other counterparts This study will help the company to retain their skilled employees and to attract the new one. This study will help us to know whether “HPC Ltd. will be able to sustain with this Salary& Wage Structure viz-a-viz Production realization and number of Employees in the present scenario.” 6. Methodology Collection of secondary data from the different companies of the same industry [Paper Industry]. Personal study. 7. Limitations Some of the companies are not ready to entertain and disclose their internal data regarding their Compensation Structure. Data provided by all other companies other than HPC Ltd. are inadequate. 9|Page
  • 17. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ INTRODUCTION TO HINDUSTAN PAPER CORPORATION LIMITED 10 | P a g e
  • 18. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Background of the company Hindustan Paper Corporation Ltd. (HPC) is a company promoted by the Government of India (GOI). The company was incorporated as a Private Limited Company in 1970 under the name Hindustan Paper Corporation Ltd and the company set up two units namely Nagaon Paper Mills (NPM) which started production in October 1985 and Cachar Paper Mill (CPM) in April 1988. The company also had three subsidiaries namely Hindustan Newsprint Ltd. (HNL), Nagaland Paper and Pulp Co. Ltd (NPPC) having a total capacity of 1,66,000 tpa. The Nagaland Paper and Pulp Co. Ltd. Which had a capacity of 33,000 tpa became sick and was referred to BIFR. Now it is being revived with doubling capacity i.e. 66,000 tpa. NPM and CPM are located at Jagiroad, Dist. Moergaon; and Panchgram, Dist. Hailakandi, in Assam respectively. Both the mills are very close to the source of raw material which is mainly bamboo. HPC is one of the largest manufacturers of paper in India (in public sector) with an installed capacity of 3,00,000 tons per annum (tpa) (including its subsidiaries). The company is engaged in the manufacture and marketing of various varieties of cultural paper and newsprint and also small quantities of caustic soda and chlorine. 11 | P a g e
  • 19. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 1. Mission Of HPC To be a major contributor to the cultural segment in paper industry in terms of volume as well as quality, production standard, customer services, R&D and technological up gradation. To ensure optimum utilization of existing assets to generate maximum internal resources for renovation, growth and expansion. To develop professional management culture consistent with the requirement of the industry to attract, develop and retain committed and skilled workforce with emphasis on trust and teamwork. To preserve the ecological balance and explore eco-friendly production process to strike a harmonious relationship between nature and industry. To explore and implement technological up gradation of the existing equipment for improved quality and increasing productivity and for greater cost effectiveness. To enlarge market channels for perennial supply of all variety of cultural paper and to ensure customer satisfaction through value addition and constant up gradation of quality. To increase utilization of unconventional raw materials and adopt recycling method to reduce dependence on forest resources for maintaining ecological balance. To provide adequate thrust on product diversification and manufacture value-added items like computer stationery, copier paper, S.S. Maplitho, etc. and create a brand equity for higher profitability and greater market share. (welcome to the world of paper) Paper for people...... From Bamboo to Books..!! 12 | P a g e
  • 20. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2. Product portfolio of HPC Ltd. Cream wove Maplitho Computer stationary paper Base paper Copier paper Offset printing paper 3. End users Education sector Large Govt./institutional buyers Publishing house Text book printers, diary and calendar printers Exercise book converter Newspaper establishment 13 | P a g e
  • 21. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 4. Projects HPC has embarked on a Rs.660 crore Modernization and technological Upgradation Plan(MTUP) covering CPM and NPM including inter-alia, 30% capacity expansion at NPM. HPC recently launched a Rs.719 crore Expansion-cum-Diversification project (EDP) at HNP seeking to add capacity for production of 1,70,000 tpa finer papers making it close 3,00,000 tpa capacity mill. All these plans are underway and will be completed phase-wise by this year. HPC is also seeking to establish a Rs.2500 crore Greenfield 3,00,000 tpa mill in the Northern india besides overseeing the Rs. 552 crore scheme for revival of the non- operational mill under the Nagaland Pulp & Paper Company Ltd. (NPPC), Tuli, Nagaland by doubling the installed capacity to 66,000 tpa . by 2013, the HPC group’s turnover would touch Rs. 3000 crore. 5. Performance & Achievements of the company HPC has been able to display a creditable performance both in physical and financial terms in the last eleven years. Even in the downturn of the market and recessionary situation HPC is showing its net profit. 5.1. Physical (during last 3 years ) 2006-07 2007-08 2008-09 [in tonnes] HPC HNL HPC HNL HPC HNL Production 208315 112565 211746 116111 175020 108005 Sales 210737 112565 213224 116111 175091 87474 14 | P a g e
  • 22. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 5.2. Financial(during last 3 years) 2006-07 2007-08 2008-09 [Rs. crore] HPC HNL TOTAL HPC HNL TOTAL HPC HNL TOTAL Turnover 786 315 1101 842 299 1141 721.07 297.67 1018.74 Profit 120 45 165 138 18 156 60.73 21.10 81.83 Before Tax 5.3.The other Achievements to name a few are- Implementation of Enterprise Resource Planning (ERP) solutions across all business location of the Company. Establishment of Tissue Culture Laboratory for large-scale production of high- yielding bamboo species. Initiation of Clean Development Mechanism(CDM) project for availing Carbon Emission Reduction(CER) opportunity under the Framework Convention for Climate Control(UNFCCC). The Company was awarded ISO certification for QMS and EMS. 15 | P a g e
  • 23. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Compensation set-up in HPC Ltd. Under the policy of HPC Ltd. They revise their Scales of Pay in every 10 years. That’s why the previous scale of pay (1997 pay structure) has replaced by the corresponding revised scales of pay (i.e. existing pay structure) with effect from 1.1.2007. 1. For Executive- Revised Scales of Pay (2007 pay structure) 1.0. Board level Executives Previous Scale Revised Scale Grade Designation of Pay of Pay Sch-A CMD Rs.27750-750-31500 Rs. 80000-125000 Sch-B Functional Director Rs.25750-650-30950 Rs. 75000-100000 1.1. Below Board level Executives Grade Generic Designation PreviousScale of Pay Revised Scale of Pay E-9 to be notified Rs.23750-600-28550 Rs.62000-80000 E-8 Executive Director Rs.20500-500-26500 Rs.51300-73000 E-7 General Manager Rs.18500-450-23900 Rs.43200-66000 E-6 Deputy General Manager Rs.17500-400-22300 Rs.36600-62000 E-5 Senior Manager Rs.16000-400-20800 Rs.32900-58000 E-4 Manager Rs.14500-350-18700 Rs.29100-54500 E-3 Deputy Manager Rs.13000-350-18250 Rs.24900-50500 E-2 Assistant Manager Rs.10750-300-16750 Rs.20600-46500 E-1 Executive Rs.8600-250-14600 Rs.16400-40500 1.2. Non-unionised supervisor Revised Scale of Grade Generic Designation PreviousScale of Pay Pay S-2 Senior Supervisor Rs.6550-220-11390 Rs.12600-32500 S-1 Supervisor Rs.6000-200-9200 Rs.11500-29600 16 | P a g e
  • 24. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2.0. Fitment benefit and fixation of pay in the revised scales of pay 2.1 A uniform Fitment Benefit @ 30% on basic pay plus DA @ 78.2% as on 1.1.2007 would be provided to all executives and non-unionised supervisors who are on the rolls of the Corporation on 1.1.2007 and continue to be in the service of the Corporation as on the date of issue of this Circular. 2.2 Where executives / non-unionised supervisors drawing pay at two or more consecutive stages in an Previousscale get bunched, then for every two stages so bunched, benefit of one increment shall be given. 3.0 Rate of Annual Increment 3.1. Annual Increment will be at the rate of 3% of revised basic pay applicable uniformly for all grades of executives and non-unionised supervisors and will be rounded off to the next multiple of Rs.10/-. 4.0 Rationalization of Date of Annual Increment 4.1 Dates of annual increments shall be brought to one standard date for all executives and non- unionised supervisors i.e. the annual date of increment otherwise due from 1.8.2009 to 1.6.2010 shall be advanced to 1.7.2009. 4.2 In case of those whose annual increments are postponed due to imposition of any penalty on disciplinary grounds under the prevalent Conduct, Discipline and Appeal Rules and practices and thus draw annual increment in different months (i.e. other than July), the annual increment of such personnel will be notionally rationalized on 1 st July on completion of the currency of punishment. 4.3 In respect of fresh appointees who join in a month other than in July, their next date of ………. increment shall be the 1st July, following after completion of probation period. 17 | P a g e
  • 25. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 5.0 Stagnation Increment 5.1 Maximum three stagnation increments @ 3% will be allowed, one after every two years , upon reaching the maximum of the revised pay scale provided the employee concerned gets a performance rating of ‘Good’ or above. 5.2 Finance Department will provide a list to HR & ES Department every year indicating the names of employees, who reached the maximum of the scale of pay for verification of performance rating of such employees and consequently issue of Office Order for release of each stagnation increment. 6.0 Pay Fixation on Promotion 6.1 One notional increment equal to the increment being drawn by the employee concerned in the pay scale before such promotion would be granted and pay fixed in the promoted pay scale and rounded off to the next multiple of Rs.10/-. 7.0 Dearness Allowances (DA) 7.1 100% DA neutralization will be adopted for all the executives and non-unionised supervisors of HPC who are on IDA pattern of scales of pay. Thus, DA as on 1.1.2007 will become zero with linked point of All India Consumer Price Index (AICPI) 2001 = 100, which is 126.33 as on 1.1.2007. The periodicity of adjustment will be once in three months as per Previous practice. The quarterly DA payable from 1.1.2007 will be as under: With effect from Rate of DA admissible With effect from Rate of DA admissible (in percentage) (in percentage) 01.01.2007 0 01.04.2008 6.3 01.04.2007 0.8 01.07.2008 9.2 01.07.2007 1.3 01.10.2008 12.9 01.10.2007 4.2 01.01.2009 16.6 01.01.2008 5.8 01.04.2009 16.9 18 | P a g e
  • 26. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 7.2 Rate of DA payable during each quarter commencing from 1.7.2009 would be notified from ………..time to time. 7.3 Basic Pay, Dearness Pay and Dearness Allowance already paid from January 2007 to April ……… 2009 under 1997pay structure would be fully adjusted against the arrears as and when ……… ……… payable. 8.0 House Rent Allowances (HRA) and House Rent Recovery (HRR) 8.1 With effect from 18.05.2009, those who have not been provided residential accommodation …….. by the Corporation, will be paid HRA at the following rates on the relevant basic pay in the …….. revised scale of pay based on classification of places / cities notified by the Government of …….. India from time to time on the basis of population, subject to fulfillment of other terms and ……. conditions Categories of Cities Rate of HRA Name of the Cities with population (per month) ‘X’ Delhi (UA), Mumbai (UA), Kolkata (UA), Chennai (UA), 30% of basic pay (above 50 lakh) Bangalore (UA), Hyderabad (UA) ‘Y’ Ahmedabad, Indore, Guwahati, Patna, Chandigarh, (between 5 lakh and Lucknow, Jaipur, Thiruvananthapuram, Kochi, Madurai, 20% of basic pay. 50 lakh) etc. ‘Z’ Unclassified Areas (such as Jagiroad, Panchgram, 10% of basic pay (less than 5 lakh) Newsprint Nagar, etc.) UA = Urban Agglomeration 8.2. House Rent Recovery in respect of those who have been provided with residential accommodation in the Corporation-owned Township will be made based on the prescribed rate on relevant basic pay in the revised scale of pay subject to the condition like standard rent / license fee. The rate of license fee will be double the Previousrate with effect from 18.05.2009, as under: 19 | P a g e
  • 27. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Revised Type of Living Area previous Rate Rate(existing) Quarters (Sq. Mtrs.) (per month) (per month) A Upto 50 Rs. 108/- Rs. 216/- B 51-75 Rs. 142/- Rs. 284/- C 76-100 Rs. 200/- Rs. 400/- D (at Mills) 101-150 Rs. 284/- Rs. 568/- D-1 (at Kolkata) D (at Kolkata) Above 150 Rs. 415/- Rs. 830/- 9.0 City Compensatory Allowance (CCA) 9.1 Payment of CCA stands dispensed with from 18.05.2009. 10.0 North-East Allowances (NEA) 10.1 Payment of NEA @ 12.5% on basic pay will be made to executives serving in the ………… ……….. Corporation’s establishments in Assam / NE Region with effect from 18.05.2009. 10.2 The above NE Allowance will also be made applicable in respect of non-unionised ……….. ……….. supervisors serving in Assam / NE Region with effect from 18.05.2009 in lieu of Special … … Compensatory (Remote Locality) Allowance which will be dispensed with simultaneously. 11.0 Non-Practicing Allowance (NPA) 11.1. NPA @ 25% of basic pay shall be payable to the Medical Officers (Doctors) with effect from ……….. 18.05.2009 who are on the regular rolls of the Corporation. 12.0 Incentive on acquiring professional qualification 12.1 The quantum of incentive being drawn by the employees under pre-revised pay scale . . ……… (1997) will be dispensed with effect from 18.05.2009 and hitherto the Incentive Scheme ……. stands withdrawn. 20 | P a g e
  • 28. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 13.0 Performance Related Variable Pay (PRVP) Scheme 13.1 The BoD has constituted a Remuneration Committee headed by a Non-Official Part-time ………….Director (Independent Director) and consisting of Director (Finance) and Director ………….(Operations) to conceptualise and operationalise the Performance Related Variable Pay ………….Scheme. The PRVP Scheme based on Performance Management System (PMS) aligned to ………….DPE prescribed parameters is under formulation for implementation w.e.f 1.4.2007. The ………….payment under Performance Related Payment Scheme (PRPS) made for FY 2007-08 will be ………… adjusted against the payment due if any, under the PRVP Scheme that may be put into ………… operation and PRPS will be substituted by PRVP Scheme. 14.0 Elimination of subsidies on Electricity, Canteen, Transport, etc. 14.1 In order to restrict the expenditure on infrastructure facilities, it has been decided that there will be no subsidy on account of Electricity, Canteen, Transport facilities, etc with effect from 18.05.2009. 15.0 Car Facilities 15.1 The Company-owned car / hired car would be provided to the CMD / Functional Directors, Executive Directors and/or Chief Executives of the Mills only. Accordingly, the practice being followed in the mills for providing vehicles to other executives for picking up and dropping will be dispensed with and actual cost will be charged as user fee with effect from 18.05.2009. 16.0 Gratuity 16.1 The ceiling for payment of gratuity in respect of executives and non-unionised supervisors is raised from Rs.3.50 lacs to Rs.10.00 lacs with effect from 1.1.2007. 17.0 PF Contribution 17.1 Deduction of contribution towards Provident Fund shall be made on the revised basic pay and DA with effect from 1.1.2007. 21 | P a g e
  • 29. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 18.0 Introduction of the concept of „Cost to Company (CTC)‟ 18.1 In terms of DPE OM dated 26.11.2008, the concept of CTC is required to be implemented in all CPSEs. The entire cost of an executive is explicitly made known by a CPSE; adopting the system of CTC for the purpose of reporting executive compensation, pay, allowances, perquisites and retirement benefits should all be monetized and included while reporting the cost of manpower to the CPSE. 18.2 It is further decided by the Government that where a CPSE has created infrastructure such ………. as township, hospital, school, club etc., the recurring expenditure on maintaining and …………running these infrastructure facilities would be taken into account. The recurring …………expenditure should be divided into two parts, based on proportion of total basic pay of …………executives and non-unionised supervisors and the total basic pay of workmen. The part ………...attributable to the executives and non-unionised supervisors would be reckoned as the ………...expenditure on perquisites and allowances, subject to the condition that the said amount ………...shall be restricted to 10% of basic pay of all executives and non-unionised supervisors …………within the overall limit of 50% of basic pay. 18.3 The total annualized expenditure towards the instant revision cannot exceed 20% of Profit …………Before Tax (PBT) for FY 2007-08. The expenditure on running and maintenance of …………infrastructure has to be within the ceiling of 10% of basic pay 19.0 Other Perks & Allowances 19.1. In terms of DPE OMs referred in (18.1) above, perks and allowances shall be considered for revision from a prospective date, subject to maximum limit of 50% of revised basic pay. Other than raising the ceiling of one month’s basic pay and DA for reimbursement of medical expenses against domiciliary treatment, no modification in Previous allowances and perquisites will be considered except those mentioned hereinabove. The Previous perks and allowances viz., reimbursement of conveyances expenses, tuition fee, family planning incentive, LTC, company leased accommodation (applicable for key officials in pay grade E-6 and above), night shift allowance for supervisors and tea allowance (wherever applicable) will continue to be regulated as per Previous entitlement / rates as admissible under the extant rules till further orders. 22 | P a g e
  • 30. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 20.0 Payment of Arrears 20.1 Those who ceased to be in the service of the Corporation with effect from 1.1.2007 and upto the date of issue of this Circular owing to retirement / superannuation , separation on account of resignation, continued ill-health duly accepted by the Competent Authority or death while in service will be eligible for payment of arrears on a pro-rata basis, whenever due. 20.2 The benefit of revised pay and DA and consequential payment of arrears shall not be …………admissible to those who have ceased to be in the service Corporation on or after 1.1.2007 on …………the following grounds: a) Dismissal b) Removal from services which shall not be a disqualification for future employment c) Resignation without permission / notice / authorization d) Resignation when disciplinary action had already been initiated and was in progress. 23 | P a g e
  • 31. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2. Negotiation through Collective Bargaining in HPC ltd. The first meeting between the Management Representatives of HPC and Representatives of the recognized Unions was held on 17.04.2007 based on Charter of Demands submitted by Unions who were recognized at that point of time. Subsequently, based on the discussions held in the meeting, the said unions submitted a common Charter of Demands vide their letter dated 19.04.2007. Thereafter, meetings were held on 14.07.2007 and 12.12.2007. However, regular meetings with the Unions continued for almost one year and the next meeting was held at Guwahati on 15.12.2008, where the newly elected Union i.e., Cachar Paper Project Workers’ Union (INTUC), which got recognition through the process of referendum held in October, 2008, also participated. As this Union was recognized subsequently, it submitted the Charter of Demand separately vide letter dated 12.12.2008. However, other Unions insisted on continuing the negotiations based on the common Charter of Demands submitted by them on 19.04.2007. Accordingly, the matter was discussed in the meeting and all the four Unions decided unanimously to continue discussions based only on the common Charter of Demands submitted on 19.04.2007. It was also clarified to the Unions that the pay, perquisites and benefits would be monetized and the personnel cost would be based on Cost to Company (CTC). Subsequently, a series of meetings were held on 07.01.2009, 28.01.2009, 26.02.2009, 26.05.2009 and 01.06.2009 at Guwahati / Kolkata on the common Charter of Demands. The final discussions between the representatives of the Management and recognized Unions were held from 08.06.2009 to13.06.2009 at Kolkata and the parties have signed an MoU on some terms & conditions which would be implemented after obtaining approval of the Board of Directors of HPC and the GoI i.e. revised Scale of pay [pay structure 2007]. (ltd., 2007) 24 | P a g e
  • 32. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 3. For Workmen-Revised Scale of Pay (2007 pay structure)/ Wage Grades 1.0. For Workmen Wage Previous Scale of Pay Revised Scale of Pay Grade W-1 Rs 4200-80-4760-85-5780 Rs.7500-16500 W-2 Rs 4300-85-4895-95-6035 Rs.7700-17200 W-3 Rs 4450-95-5115-105-6375 Rs.7900-18100 W-4 Rs 4650-105-5385-115-6765 Rs.8200-19800 W-5 Rs 4850-115-5655-125-7155 Rs.8500-20500 W-6 Rs 5050-125-5925-135-7545 Rs.8900-22000 W-7 Rs 5350-135-6295-145-8035 Rs.9500-24000 W-8 Rs 5650-145-6665-155-8525 Rs.10000-25200 W-9 Rs 5950-160-6430-200-9030 Rs.10700-27600 W-9A Rs.6000-200-9200 Rs.11500-29600 W-9B Rs.6550-220-11390 Rs.12600-32500 2.0 Fixation of Pay in the Corresponding Revised Scales of Pay 2.1 A uniform Fitment Benefit @ 30% on basic pay plus DA @ 78.2% as on 01.01.2007 would be provided to all workmen who are on the roll of the Corporation on 01.01.2007 and continue to be in the service of the Corporation as on the date of signing of the Memorandum of Settlement. 25 | P a g e
  • 33. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 3.0 Rate of Annual Increment 3.1 Annual Increment will be at the rate of 3% of revised basic pay applicable uniformly for all grades of workmen and will be rounded off to the next multiple of Rs.10/-. 4.0 Stagnation Increment 4.1 The rate of stagnation increment will be 3% of the revised basic pay and workmen will be allowed to draw maximum three stagnation increments, one after every two years, upon reaching the maximum of the revised pay scale provided the workman gets a performance rating of ‘Good’ or above. 5.0. Pay Fixation on Promotion 5.1. Accordingly, one notional increment @ 3% in pre-promoted pay scale would be granted and ………..the resultant figure so arrived at after rounding off to next multiple of Rs.10/-, would be the ………..revised basic pay in the promoted grade / scale of pay. 6.0 Dearness Allowance (DA) 6.1 100% DA neutralization (under IDA pattern of pay scales) will be adopted for all the workmen covered under this Settlement The quarterly DA payable from 01.04.2007 will be as under: With effect from Rate of DA admissible With effect from Rate of DA admissible (in percentage) (in percentage) 01.04.2007 0.8 01.07.2008 9.2 01.07.2007 1.3 01.10.2008 12.9 01.10.2007 4.2 01.01.2009 16.6 01.01.2008 5.8 01.04.2009 16.9 01.04.2008 6.3 01.07.2009 18.5 26 | P a g e
  • 34. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 6.2 Basic Pay, Dearness Pay and Dearness Allowance already paid from January 2007 under 1997 pay structure would be adjusted against the arrears payable after implementation of revised pay structure (2007). 7.0 Local Travelling Expenses (LTE) 7.1 The reimbursement of LTE will be Rs. 20/- per day for those who reside within a radius of 10 Kms and Rs.40/- per day for those who reside beyond the radius of 10 Kms from the place of duty, on actual attendance basis. 7.2 As regards reimbursement of LTE for attending duty on holidays / weekly off days, the following procedure will be followed. a) In case an employee is allowed Compensatory Off in lieu of overtime, he will be reimbursed LTE at the prescribed rate @ Rs.20/- or Rs.40/- per day as the case may be, for the day he attends duty. b) No reimbursement of LTE will be admissible if the employee is paid overtime allowance on attending duty on any holiday / weekly off day. 7.3 If a workman attends duty on half a day’s Casual Leave, LTE will be admissible at full rate. 8.0 Reimbursement of Conveyance Expenses 8.1 The reimbursement of Conveyance Expenses for maintaining Two-Wheeler (Scooter / Motor Cycle) will be Rs.1050/- per month for all grades of workmen with effect from 03.08.2009. 8.2 The special conveyance allowance for PWD will be double the rate of LTE as mentioned at para 7.1 above with effect from 03.08.2009. 9.0 Reimbursement of Education / Tuition Fee for Children 9.1 Reimbursement of Education/Tuition Fee including Vidyalaya Vikas Nidhi (VVN) as prevalent in Kendriya Vidyalaya and admission fee or any other subject fee (like science/laboratory fee, computer fee, library fee, music fee and games/sports fee) will be sanctioned at actuals limited to Rs.350/- per child per month on specific declaration of the workmen supported by a Certificate from the Head of the Institution. This will apply to students studying in Nursery to Class XII subject to the condition that this is payable to the institution(s) which 27 | P a g e
  • 35. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ are authorized to sponsor such children for recognized examinations and it will be limited to maximum of two children. 9.2 The Reimbursement of Education/Tuition Fee to the employees’ Children with disability will be limited to Rs.750/- per month per child with effect from August, 2009 subject to production of necessary fee receipt / certificate of the school. 10.0 House Rent Allowance (HRA) 10.1 With effect from 03.08.2009, those who have not been provided with residential accommodation by the Corporation, will be paid HRA at the following rates on the relevant basic pay in the revised scale of pay based on classification of places / cities notified by the Government of India from time to time on the basis of population, subject to other terms and conditions. Categories of Cities Rate of HRA Name of the Cities with population (per month) ‘X’ Delhi (UA), Mumbai (UA), Kolkata (UA), Chennai (UA), 30% of basic pay (above 50 lakh) Bangalore (UA), Hyderabad (UA) ‘Y’ Ahmedabad, Indore, Guwahati, Patna, Chandigarh, (between 5 lakh and Lucknow, Jaipur, Thiruvananthapuram, Kochi, Madurai, 20% of basic pay 50 lakh) etc. ‘Z’ Unclassified Areas (such as Jagiroad, Panchgram, 10% of basic pay (less than 5 lakh) Newsprint Nagar, etc.) UA = Urban Agglomeration 11.0 House Rent Recovery (HRR) 11.1 HRR in respect of workmen who have been provided with residential accommodation in the Corporation-owned Township at different locations (i.e., at Mills & Kolkata) will be made based on the prescribed rate on relevant basic pay in the revised scale of pay subject to the condition like standard rent / license fee. The rate of license fee will be double the Previous rate with effect from 03.08.2009, as under. 28 | P a g e
  • 36. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Type of PreviousRate Revised Rate Quarters (per month) (per month) Mills Kolkata Mills Kolkata A 35 70 70 140 B 75 142 150 284 12.0 City Compensatory Allowance (CCA) 12.1 Payment of CCA stands dispensed with from 03.08.2009 13.0 North-East Allowance (NEA) 13.1 Payment of NEA @ 12.5% on basic pay with effect from 03.08.2009 will be made to all workmen serving in the Corporation’s establishments in Assam / NE Region in lieu of Previous special Compensatory (Remote Locality) Allowance which will be dispensed with simultaneously. 14.0 Shift Allowance 14.1 Shift Allowance will be paid with effect from 03.08.2009 to the workmen of NPM and CPM who are working in rotating shifts as per the following rates. Shift Rate A Rs. 20/- B Rs. 30/- C Rs. 80/- 15.0 Washing Allowance 15.1 Washing Allowance at the following rates will be paid with effect from 03.08.2009 to the workmen who are provided with uniform subject to the condition that they attend duty in uniform and keep them neat and clean. 29 | P a g e
  • 37. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ General Category - Rs.150/- per month Para-Medical Staff - Rs.180/- per month 16.0 Hill Tract Allowance (HTA) 16.1 HTA @ Rs.250/- per month will be paid with effect from 03.08.2009 during harvest season to the Forest Staff of NPM and CPM working at difficult location of forest areas. 17.0 Cash Handling Allowance (CHA) 17.1 The following rates of CHA as prescribed by the Government of India will be applicable from 03.08.2009 subject to conditions prescribed under the rules. Amount of average monthly cash Rate of CHA disbursement (per month) Upto Rs.50,000 Rs 150/- Over Rs.50,000 and upto Rs. 2 lakh Rs 300/- Over Rs. 2 lakh and upto Rs.5 lakh Rs 400/- Over Rs. 5 lakh and upto Rs. 10 lakh Rs 500/- Over Rs. 10 lakh Rs 600/- 18.0 Family Planning Allowance (FPA) 18.1 the incentive in the form of ‘Family Planning Allowance’ will be paid as follows- Post / Pre-revised Corresponding Revised Rate of Family Grade Pay Scales (1997) Pay Scales (2007) Planning Allowance (p.m) W-1 Rs 4200-80-4760-85-5780 Rs.7500-16500 Rs.230/- W-2 Rs 4300-85-4895-95-6035 Rs.7700-17200 Rs.240/- 30 | P a g e
  • 38. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ W-3 Rs 4450-95-5115-105-6375 Rs.7900-18100 Rs.240/- W-4 Rs 4650-105-5385-115-6765 Rs.8200-19800 Rs.250/- W-5 Rs 4850-115-5655-125-7155 Rs.8500-20500 Rs.260/- W-6 Rs 5050-125-5925-135-7545 Rs.8900-22000 Rs.270/- W-7 Rs 5350-135-6295-145-8035 Rs.9500-23900 Rs.290/- W-8 Rs 5650-145-6665-155-8525 Rs.10000-25000 Rs.300/- W-9 Rs 5950-160-6430-200-9030 Rs.10700-27400 Rs.330/- W-9A Rs.6000-200-9200 Rs.11500-29600 Rs.350/- W-9B Rs.6550-220-11390 Rs.12600-32500 Rs.380/- 19.0 Incentive on acquiring professional qualification 19.1 The quantum of incentive being drawn by the employees under pre-revised pay scale (1997) will be dispensed with from 03.08.2009 and hitherto the Incentive Scheme stands withdrawn. 20.0 Funeral Expenses and death Relief Fund 20.1 In case of death of an employee, an amount of Rs.3000/- or as admissible under the Workmen’s Compensation Act, 1923, whichever is higher, will be paid by the Corporation on account of Funeral Expenses. 20.2 A matching contribution limited to Rs.100/- per member employee under the Death Relief Fund (DRF) Scheme as in vogue in the respective units, shall be made by the Corporation. 21.0 Gratuity 21.1 The ceiling for payment of Gratuity will be raised from Rs.3.50 lakh to Rs.10.00 lakh with effect from 01.01.2007. 31 | P a g e
  • 39. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 22.0 Gratuitous Payment in case of Death / Permanent Total Disability 22.1 The ceiling of gratuitous payment is of Rs.3 lakh. The monthly total income of dependent family members will be revised from Rs.4,199/- to Rs.7,499/-. These enhanced ceilings will be applicable with effect from 03.08.2009. 23.0 Performance Related Variable Payment (PRVP) Scheme 23.1 The PRVP will be directly linked to the performance of the workmen and percentage ceiling of PRVP will be 20% of the basic pay. The ‘Bell Curve Approach’ will be adopted in grading the workmen so that not more than 5% workmen are ‘Outstanding / Excellent’, 40% ‘Very Good’, 45% ‘Good’ and 10% ‘Average’. The workmen rated ‘Poor’ will not be eligible for any PRVP. 23.2 The PRVP applicable for ‘Outstanding / Excellent’ performers will be 100% of the ceiling prescribed (i.e, 20% of basic pay). Similarly, in case of ‘Very Good’, ‘Good’ & ‘Average’ performers, the PRVP will be 80%, 60% & 40% respectively of the prescribed ceiling of 20%. 24.0 Festival Advance 24.1 Admissible amount of Festival Advance shall be Rs.5,000/- in accordance with the Previous practice and regulations. 25.0 School Re-opening Advance 25.1 A recoverable advance of Rs.4,000/- will be sanctioned to the workmen once in a calendar year whose children are studying upto Class XII. It will be paid to those workmen who have at least Rs.3,000/- net pay in the previous month. 26.0 Payment of Arrears 26.1 Those who ceased to be in the service of the Corporation with effect from 01.01.2007 and up to the date of implementation of revised pay structure, owing to retirement / superannuation, separation on account of resignation, continued ill-health duly accepted by the Competent Authority or death while in service will be eligible for payment of arrears on a pro-rata basis, whenever due. 32 | P a g e
  • 40. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 26.2 The benefit of revised pay and DA and consequential payment of arrears shall not be admissible to those who have ceased to be in the service of the Corporation on or after 01.01.2007 26.3 As a result of this wage revision with effect from 01.01.2007, there will be no calculation / arrear payment with regard to overtime wages, TA/DA, LTC and such other allowances as are related to or connected with the basic pay, except mentioned specifically . 33 | P a g e
  • 41. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ About Competitor 1. Mysore Paper Mills Limited 1.1. Introduction of the MPM Ltd. The Mysore Paper Mills Ltd. (MPM) founded by Sri.Krishanaraja Wodeyar Bahadur in 1937 the Maharaja of erstwhile Mysore State was incorporated on 20 th May 1936 under the Mysore Companies Regulation, VIII of 1917. Later it became a Government company in 1977 under section 617 of the Companies Act, 1956. The Company has its Registration Office at Bangluru and its plant located at Bhadravati, Shimoga District, Karnataka state. The company has an Authorized capital of 150 crs. And paid up capital 120 crs. The share of the company are listed in the BSE and there are about 17, 000 shareholders. The company is managed by eminent Board of Director consisting of IAS, IFS and other professionals. The Chairman & Managing Director of the company is assisted by a team of professionals in various fields who have expertise in production, finance, marketing etc . with a dedicated team force. MPM with 5000 employees has its own township. About 15000 families of the cane growers who supply sugarcane to the company are directly dependant on this company and many more depend indirectly . the direct and indirect contribution by MPM to the local economy is about Rs. 200 Cr. P.A. Products Writing Papers, Newsprint Papers, Printing & packaging Paper and Manufacture of Plantation White Sugar. To produce these products they use Pulpwood like Pines, Acacia, Eucalyptus. (Mysore paper mills.) 34 | P a g e
  • 42. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 1.2. Compensation Setup in Mysore Paper Mills Ltd. A. For Workmen- Current Scale of Pay GRADES Revised Pay Scale For The Current Period (01.03.2007 to 29.02.2012) MR CMR M-0 TG-1 8600-225-9500-250-10500-300-12300-350-14400-400-16800-450-19500 M-1 TG-1 8200-200-8600-225-9500-250-10500-300-12300-350-14400-400-16800 M-3 - M-3/M-2/M-2PG: 7800-200-8600-225-9500-250-10500-300-12300-350-14400- 400-16800 M-2 - (Please see the above row) - CT-1 7450-175-7800-200-8600-225-9500-250-10500-300-12300-350-14400 - CT-2 7100-175-7800-200-8600-225-9500-250-10500-300-12300-350-14400 M-4 CT-3 6800-150-7100-175-7800-200-8600-225-9500-250-10500-300-12300-350-14400 M-5 CT-4 C4 M-5/CT-4/CT-4PG:6500-150-7100-175-7800-200-8600-225-9500-250-10500-300- PG 12300 M-6 CT-5 6125-125-6500-150-7100-175-7800-200-8600-225-9500-250-10500 M-7 CT-6 5800-100-6000-125-6500-150-7100-175-7800-200-8600-225-9500 M-8 CT-7 5500-100-6000-125-6500-150-7100-175-7800-200-8600-225-9500 M-9 CT-8 5200-100-6000-125-6500-150-7100-175-7800-200-8600-225-9500 M-10 CT-9 4800-100-6000-125-6500-150-7100-175-7800-200-8600-225-9500 M-11 CT-10 4400-80-4800-100-6000-125-6500-150-7100-175-7800-200-8600-225-9500 A.1. Basic Pay Fixation The revised basic pay is fixed on the following formula Pre-revised Basic pay as on 01.03.2007 (A) + Personal pay (B) +Applicable IDA (C) +10% proposed hike on A+B+C Minus present stat Govt. DA as on 01.03.2007 (Total pay / 1.1225% taking 12.25% Govt. DA on 01.03.2007). 35 | P a g e
  • 43. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A.2. State Govt. DA rates From 01.01.2007 to 30.06.2007 - 12.25% From 01.07.2007 to 31.12.2007 – 17.50% From o1.07.2008 to 31.12.2008 – 26.75% From 01.01.2009 - 32.75% A.3. Superannuation Subscription Superannuation Subscription given is 7.5% under the current period of settlement. A.4. Transport Subsidy The conveyance allowance is given to the employees who own two wheelers. The transport subsidy for the employees who are staying outside the township at their own request will not be given for Bus charges. However, 3 months time is granted for them to make alternative arrangement. Once they own vehicles, they are eligible for conveyance allowance as per the rule. A.5. Leaves a) The Earned Leave or Privilege Leave or Vacation Leave is called single name –Earned Leave (EL) and it is of 240 days. b) One day special leave given for those who donate blood on the day of donation will be treated as physical attendance for allowance purpose. A.6. Stagnation Increment Stagnation increment is paid every year at the rate of last increment in the stagnated pay scale. 36 | P a g e
  • 44. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A.7. Other Allowances Sl. No. Perks PreviousRate (per month) 1 City Compensatory allowance per month 200 2 Night shift allowance per shift 40 3 Rope allowance per shift 6 4 Washing allowance per month 35 5 Washing / Cycle allowance per month 20 6 Driver Allowance per month a. Category- A 275 b. Category-B 225 c. Category-C (tractor driver) 50 7 Chief Cashier allowance per month 150 8 Asst. Cashier allowance per month 125 9 Cash Handling allowance per occasion 75 10 In-charge allowance day/ shift 12/8/5 11 Attendance Bonus: Production 300/200/125 Non-Production 250/175/125 A.8. Hazardous Allowance Hazardous Allowances only for workers and employees working within the factory premises at hazardous places at the rate of Rs. 3 per shift/ day. A.9. Festival Advance Festival advance of Rs. 4800 per year for Ugadi and Ganesha festival for Rs. 2400 to each festival at free of interest recoverable in equal monthly installment for all permanent employees on roll. 37 | P a g e
  • 45. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A.10. Education Advance The recover able education advance of Rs. 4000/- at 10%p.a. interest shall be paid and payment shall be made on May 12th of every year or shall be paid on previous day or with the May salary only for payment employees who are on the roll of the company. A.11. Death Relief Fund The management has agreed to pay Rs. 15000/-as DRF to all employees expire while in service. Out of which on the day of incident / death Rs.5000/- as cash and remaining Rs. 10,000/- by cheque to the concerned family members. A.12. Stitching Charges MPM pays the stitchingcharges with increase of 10% for every two years. A.13. Soap and Towels Provide good quality soaps and towels at work place to employees. A.14. House Rent Allowance HRA at rate of Rs. 275/- shall be provided to only those who have not been provided with company quarters but workmen at Bangluru and Regional offices will be given at a rate of Rs 1500/- for PG I employees and Rs 1300/- for other catogorory. A.15. Medical Facilities Medical facilities provide at hospitals to the spouse, children and dependent parents of the employee. 38 | P a g e
  • 46. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ B. For Executives- Current Scale of Pay Grade Pay Scale (Rs.) on previous pattern Gr-1 4650-240-5850-270-7200-300-8700-330-10350-360-12150-390-14100-420-16200 Gr-2 5850-270-7200-300-8700-330-10350-360-12150-390-14100-420-16200-450-18450 Gr-3 7200-300-8700-330-10350-360-12150-390-14100-420-16200-450-18450-480- 20850 Gr-4 8700-330-10350-360-12150-390-14100-420-16200-450-18450-480-20850-510- 23400 Gr-5 10350-360-12150-390-14100-420-16200-450-18450-480-20850-510-23400-540- 26100 Gr-6 12150-390-14100-420-16200-450-18450-480-20850-510-23400-540-26100-570- 28950 Gr-7 14100-420-16200-450-18450-480-20850-510-23400-540-26100-570-28950-600- 30150 Gr-8 14750-450-17000-490-19450-530-22100-570-22100-570-24950-610-28000-650- (DGM) 31250 Gr-9 16000-490-18450-530-21100-570-23950-610-27000-650-30250-690-33700 (JGM) Gr-10 17750-530-20400-570-23250-610-26300-650-29550-690-33000-730-36650 Gr-11 19250-570-22100-610-25150-650-28400-690-31850-730-35500-770-39350 (Dir/ED) B.1. Dearness allowance The DA as announced by the Govt. of Karnataka to ite employees from time to time would be paid to the officers of the company as at present in the revised pay scales. [as per given in A.2.]. 39 | P a g e
  • 47. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ B.2. House Rent allowance a) At Bangluru :- 15.75% of Previous basic + PP b) Regional offices :- 21.50% of Previous basic + PP The Previous HRA applicable to officers at Bhadravati, Shimoga and other places remain unaltered. B.3. Medical Reimbursement a) Gr-I to IV Officers : 51% of Previous basic + PP b) Gr-V and above : 56% of Previous basic + PP B.4. Night Shift Allowance Night Shift Allowance is Rs.35/- per shift . B.5. Leave Encashment Officers are permitted to encash upto 30 days PL at their credit every year or 60 days PL at their credit once in a block period of 2 years w.e.f Block period of 2005-06. (mills, 2007) 40 | P a g e
  • 48. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2. Tamil Nadu Newsprints and Paper Limited 2.1. Introduction of TNPL Tamil Nadu Newsprint and Papers Limited(TNPL) was established by the Government of Tamil Nadu during early eighties to produces Newsprint and Printing & Writing Paper using bagasse, a sugarcane residue, as primary raw material. The company commenced production in the year1984 with an initial capacity of 90,000 tonnes per annum Over the years, the production capacity has been increased to 2,45,000 tonnes per annum and the Company has emerge as the large bagasse based Paper Mill in the world consuming about one million tones of bagasse ever year. The Company is in the process of implementing the Mill Expansion Plan for increase the capacity to 4,00,000 tonnes per annum from July 2010. Products TNPL offers high-quality surface sized and non-surface sized paper to suit the needs modern high speed printing machines. TNPL manufactures Printing and writing Papers in substances ranging from 50 GSM to 90 GMS. As the paper is acid free, it has longer color stability and enhanced permanency in terms of strength characteristics. The paper reels have uniform profile with strength properties to cope even with high speed machines. The Company caters to the requirements of multifunctional printing processes like- sheet- fed , web-offset and digital printers. (TNPL) 41 | P a g e
  • 49. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2.2. Compensation Setup in Tamil Nadu Newsprint and Paper Mills Ltd. A. For Executives A.1 Scale of Pay Grade Basic Pay (Rs.) Director 46500-1500-61500 CGM 41500-1400-55500 GM 36000-1200-48000 DGM 30500-1000-40500 AGM 26000-800-34000 SR.Manager 22500-700-29500 Manager 21500-600-27500 Dy. Manager 18000-500-23000 Asst. Manager 15000-425-19250 Officer 12500-350-16000 Asst. Office 10500-250-13000 GET Rs.14400/- (1st year) , Rs.16200/- (2nd year) AO (T) Rs. 13200/- (1st year) ,Rs. 15000/- (2nd year) A.2. Dearness Allowance a). F.D.A – Minimum Rs.5232/- and varies individual to individual. b). V.D.A – Basic pay upto Rs.16000=0.40% of basic for every Basic pay upto from Rs.16001 to Rs. 25000 = 0.36% of basic for every 8 point increase over 2680 points. Basic pay from 25001 and above 0.36% of basic pay every 8 point increase over 2680 point upto Rs.25000/- + 0.18% over Rs. 25000/- A.3. House Rent Allowance (HRA) Grades Branches Other Places Employees Amount residing in (Rs.) quarters AGM & Above 35% 30% For type D 700 DM,Mgr. & Sr.Mgr. 30% 25% For type C 750 AO to AM 25% 25% For type B 800 - - - For type A 850 - - - For TA type 900 42 | P a g e
  • 50. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A.4. City Compensatory Allowance (CCA) Grades Amount (Rs.) Asst. Officer 650 Officer 800 AM to Manager 1000 Sr. Manager 1200 AGM and DGM 1400 GM and above 1600 A.5. Conveyance Reimbursement DM and above: Car = Rs. 3000/- Scooter/Motorcycle= Rs. 1350/- Moped = Rs. 750/- A.O to A.M Scooter/ Motorcycle = Rs.1350/- Moped = Rs.750/- A.6. Children Education Allowance Grades Amount per child A.O and Officer Rs. 100/- A.M to D.M Rs. 125/- Manager and above Rs. 150/- Subject to maximum of 2 children A.7. Offsite Allowance Intake well and Pugalur = Rs. 350/-p.m. Other offsites and Wind Farm = Rs.700/-p.m. 43 | P a g e
  • 51. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ A.8. Free Electricity(for company quarter) Grades No. of units per month DGM and above 300 AGM 120 DM to Sr. Manager 90 Officer and A.M 70 Asst.Officer 50 A.9. Family Planning Incentive Rs.25000/- and 1 kg Complan and 6 days special leave A.10. Leave Encashment and Leave Credit Encashment of Privilege Leave (PL), normally allowed to 15 days per year. However, if an employee not encashing PL in the previous years the accumulation of 15 days per year is allowed. PL : 30 days per annum PL accumulation day : Maximum 240 days Sick Leave(SL) :10 days per annum SL accumulation: No limit Casual leave(CL): 10 days per annum A.11. LTC LTC can be availed once in two years(block yr.) A.12. Funeral Expenses Rs.5000/- A.13. Other Benefits Festival advance One pair of shoes & 3 set of socks issued to male employees and chapals to females every year. Every year 2 sets of uniform are also issued to every employee. Sweet distribution for Deepawali and Ayudha Pooja. 44 | P a g e
  • 52. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ B. For Workmen B.1. Current scale of Pay Category Existing Pay Scale Unskilled lower Grade 4320-36-4680-39-4875 Unskilled 5453-43-5885-45-6558 Semi skilled (C) 5688-51-6198-53-6993 Semi skilled (B) 5904-54-6444-56-7284 Semi skilled (A) 6120-58-6700-61-7615 Skilled (B) 6336-75-7086-78-8256 Skilled (A) 6552-83-7382-88-8086-93-8737 Highly skilled 6912-95-7862-100-8662-105-9397 B.2. Dearness Allowance TNPL has two types of DA - (1) Fixed DA and (2) Variable DA. B.3. House Rent Allowance (HRA) HRA will be paid at the rate of 12% of Basic Pay for the workmen who have not been provide with company accommodation. B.4. Washing Allowance Washing allowance is Rs.74 per month. B.5.Conveyance Allowance Conveyance allowance is Rs. 340 per month. B.6.Conveyance Reimbursement Workmen possessing and using automobile two wheeler vehicles not less than 49cc will be given Rs. 365/-. Workmen possessing and using automobile two wheeler vehicles not less than 98cc will be Rs. 440/-. B.7. Night Shift Allowance Night shift allowance paid to workmen posted to work in “C” shift is Rs. 12 per night shift. 45 | P a g e
  • 53. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ B.8. Miscellaneous Compensatory Allowance Rs.95/- paid to every workmen every month as a miscellaneous compensatory allowance. B.9. Electricity Units For Colony Residents Supply of free electricity of 5 units per month for residents of company’s Housing colony. B.10. Fire Tender Allowance Workmen in security Department will be paid Fire Tender Allowance @ Rs. 75/-. B.11. Special Payment To Workmen in Offsite And Other Areas Workmen in Windfarm and offsite will be paid offsite allowance of Rs.400/- Workmen in Intake-well and Pugalur offsite allowance will be paid Rs.225/- B.12. Family Planning Incentive Rs. 3000/- shall be paid to eligible workmen. B.13. Funeral expenses In the event of death of a workmen while in service, an amount of 5000/- will be paid. B.14. Employee Benefit Scheme (EBS) Company’s contribution towards EBS is Rs. 500/- B.14. Group Insurance Coverage provided to the workmen under Group Insurance Scheme is Rs. 75000/- (TNPL, 2006) 46 | P a g e
  • 54. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Comparative Analysis As we came to know from this study that all the three concerned companies i.e. HPC ltd, TNPL and MPM ltd. follow Graded Pay Structure. A Pay Range is attached to each grade which defines minimum and maximum rate payable to any job and indicates scope provided for job holders to progress through the range. To Analyze the difference in Pay Range of Basic Salary of all the three companies let us see the following graphs :- 1. For Workmen HPC Ltd. Grade Minimum(Rs) Maximum(Rs) Gap(Rs) % Range W-1 7500 16500 9000 120 W-2 7700 17200 9500 123 W-3 7900 18100 10200 129 W-4 8200 19800 11600 141 W-5 8500 20500 12000 141 W-6 8900 22000 13100 147 W-7 9500 24000 14500 153 W-8 10000 25200 15200 152 W-9 10700 27600 16900 158 W-9A 11500 29600 18100 157 W-9B 12600 32500 19900 158 Table 1: % range in basic pay of HPC ltd. 0 2 4 6 8 10 12 25000 180% 158% 158% 157% 153% 160% 152% 147% 141% 141% 20000 140% 129% 123% 120% 120% 15000 100% Gap 19900 80% % Range 18100 10000 16900 15200 14500 60% 13100 12000 11600 10200 9500 40% 9000 5000 20% 0 0% W-1 W-2 W-3 W-4 W-5 W-6 W-7 W-8 W-9 W-9A W-9B Figure 1:% Range of each grade for workmen in HPC ltd. 47 | P a g e
  • 55. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ MPM Ltd. Grade Minimum(Rs) Maximum(Rs) Gap(Rs) % Range M-0/TG-1 8600 19500 10900 127 M-1/TG-2 8200 16800 8600 105 M-3/ 7800 16800 9000 115 M-2/ 7800 16800 9000 115 CT-1 7450 14400 6950 93 CT-2 7100 14400 7300 103 M-4/CT-3 6800 14400 7600 112 M-5/CT-4 6500 12300 5800 89 M-6/CT-5 6125 10500 4375 71 M-7/CT-6 5800 9500 3700 64 M-8/CT-7 5500 9500 4000 73 M-9/CT-8 5200 9500 4300 83 M-10/CT-9 4800 9500 4700 98 M-11/CT-10 4400 9500 5100 16 Table 2 : % range in basic pay of MPM Ltd. Figure 2: %Range of each grade for workmen in Mysore Paper Mills Ltd. 48 | P a g e
  • 56. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ TNPL Grade Minimum(Rs) Maximum(Rs) Gap(Rs) % Range Unskilled Lower Grade 4320 4875 555 13 Unskilled 5453 6558 1105 20 Semi-Skilled(C) 5688 6993 1305 23 Semi-Skilled(B) 5904 7284 1380 23 Semi-Skilled(A) 6120 7615 1495 24 Skilled (B) 6336 8256 1920 30 Skilled (A) 6552 8737 2185 33 Highly Skilled 6912 9397 2485 36 Table 3: % range in basic pay of TNPL Figure 3:%Range of each grade for workmen in Tamil Nadu Newsprints and Paper Ltd. 49 | P a g e
  • 57. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Basic pay is the most important, secure and fixed component of compensation. After getting the information about basic pay structure of all the three companies we can say that HPC ltd. and MPM ltd. have vertical structure as there are 10 to 14 grades. However, TNPL has horizontal structure having less number of grades as compare to HPC Ltd. and MPM Ltd. which is easier to handle for TNPL’s administration. From the above graphs (fig: 1,2,3) regarding with the percentage range of each grade for workmen of their basic pay we can see, as the grade is increasing in HPC Ltd. and TNPL the gap between minimum and maximum wage within each grade also increasing. On the other hand there is no consistency in the gap between minimum and maximum wage in MPM Ltd. In case of HPC there is a big difference in ‘% Range’ between the lowest (W-1) and highest (W-9) grades i.e. 120% and 158% respectively. The reason behind this can be - To accommodate the employee drawing maximum Basic pay in the pre-revised pay scale in such a way that after fixation of pay in the revised pay structure they could continue to draw at least three annual increments. So basically HPC ltd. has formed very good basic pay structure for their workmen and they have maintained the proper basic pay ratio between the lower most and top most employee of the organization i.e. 1:10 . 50 | P a g e
  • 58. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Comparison of salary and wages of Workmen among all three companies is given below :- Main Topic Sub Topic Hindustan Tamil Nadu Mysore paper paper newsprint and mills ltd. corporation paper ltd. ltd. Salary Basic Given in Given in Given in figure-1 figure-3 figure-2 DA Variable DA It has Fixed DA Variable DA and Variable DA both. Annual They follow here, it is a fixed here, it is a increment percentage amount of fixed amount of based increment increment increment 3% of basic pay of worker Stagnation 3% of basic pay workers who Ith shall be paid Increment of worker one reach to every year at after every two maximum of the rate of last years upto three scale of pay will increment. times only continue to draw annual increment on the respective anniversary date. Performance Related payment/ Bonus Incentive/ NA Productivity Rewards linked incentive: NA Rs. 10/- per month 51 | P a g e
  • 59. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Bonus Performance Payment of Attendance related variable bonus depends bonus- payment is on Profit Production there. generated in that bonus: Bonus also particular Rs.300/200/125 there as per financial year Non-prod. Bonus Act. Bonus : Rs.250/175/125 Perk and Allowance/Benefits/reimbursement Conveyance Reimbursement conveyance not mentioned Reimbursement/ for two wheeler allowance: Rs but they give Allowance : Rs 1050/- 340/- bus charges and conveyance to the reimbursement: employees who two wheelers own two not less than wheeler 49cc = Rs.365/- & 98cc= Rs.440/- Night Shift For shift 'C'= For shift 'C' = Rs. 40/- per Allowances Rs. 80/- per Rs.12/- per shift shift shift Magazines/HRD NA (Not NA NA Allowances available) LTC/LLTC by train only NA NA once in a block year Canteen subsidy NA NA Provide Leave 300 day 240 day Encashment Washing General Rs.74/- Rs.35/- Allowance category = Rs.150/- pm Para-Medical staff = Rs. 180/- pm Electricity Electricity: NA free electricity : /Water Water : 5 units p.m for Subsidies Rs.20 /- residents of Company's housing colony 52 | P a g e
  • 60. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Family Planning some amount of Rs.3000/- NA Incentive money paid from W-1 to W-9B within the range of Rs230/- to Rs. 380/- per month. City NA NA Rs. 200/- compensatory allowance Location based North-East NA allowance allowance : at the rate of 12.5% Hill Tract allowance: at the rate of Rs.250/- per month during the harvest season in the forest. Cash Handling Upto CHA : Rs.75/- allowance Rs.50,000/- = Asst. cashier (CHA) Rs 150/- p.m allowance p.m= Over Rs. Rs.150/- 50,000/- and upto Rs 2 lakh = Rs. 300/- Over Rs.2lakh and upto Rs.5lakh = Rs.400/- Over Rs.5lakh/- and upto Rs.10lakh = Rs 500/- Over Rs.10 lakh= Rs 600/- Social Amenities & benefits HRA HRA is location HRA will be HRA will be based paid at the rate paid at the rate city type 'X'= of 12% of basic of Rs. 275/- 30% of basic pay. For Bangluru pay workmen: Rs. cty type 'Y' = 1500/- 20% of basic For PG-I pay : Rs. 1300/- cty type 'Z' = 10% of basic pay 53 | P a g e
  • 61. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Education/ School Re- NA Facility of Tuition Fee opening education advance: advance is Rs 4000/- for provided : Rs. children 4000/- at p.a. studying upto interest shall be class XII. paid. Reimbusement One time of tution fee: education Rs. 350/- p.m. incentives for per child upto children of two children workmen on only. scoring 60% marks in X and XII Housing Quarters from Quarters from Quarters from company company company provided provided provided Medicals One month's They provide Medical basic + DA of facilities October provided at MPM Hospital to the spouse and children including the employee. Uniform Uniform Two sets of NA provided uniform will be provided to workers. Funeral Rs 3000/- Rs 5000/- Rs. 5000/- expenses Death Relief A matching NA Rs. 10,000/- Fund contribution shall be paid to limited to Rs the family 100/- per members. member contribution of unit. Gratuitous Rs. 3 Lakh NA NA Payment Retiral Benefits Insurance Group Group NA insurance: Rs insurance: Rs. 62000/- 75000/- PF/CPF 12% not mentioned not mentioned 54 | P a g e
  • 62. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Gratuity max. Rs. 10 not mentioned not mentioned lakhs but for the purpose of computing even the training period of worker under company's training will be reckoned as service. Medical Benefits Post retirment NA NA / Facilities medical benefits through medi- claim for employee and spouse coverage Rs. 2 lakhs Company's 8.33 % of max. contribution to pay of Rs. Pension 6500/- Superannuation yet not decided NA 7.50% Subscription Any Other Items EBS NA Rs. 500/- Miscellaneous Rs.95/- per compensatory month allowance 55 | P a g e
  • 63. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 2. For Executive Main Topic Sub Topic Hindustan paper Tamil Nadu Mysore paper corporation ltd. newsprint and mills ltd. paper ltd. Salary Basic No need to No need to No need to compare compare compare DA Variable DA It has Fixed DA Variable DA and Variable DA both. Annual increment They follow here, it is a fixed here, it is a fixed percentage based amount of amount of increment increment increment 3% of basic pay of worker Stagnation 3% of basic pay employee who Ith shall be paid Increment of employee one reach to maximum every year at the after every two of scale of pay will rate of last years upto three continue to draw increment. times only annual increment on the respective anniversary date. Performance Related payment/ Bonus Incentive/rewards Performance Production linked PLI- variable % /PLI related variable incentive= Rs.100/- on basic based on payment is there. range of production: Production Depts. = Rs.1175/- (100%) Non-production Depts= Rs.590/- (50%) 56 | P a g e
  • 64. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Perk & Allowance/Benefits/reimbursement Conveyance ED = Rs.3000 Conveyance conveyance Reimbursement/ GM= Rs.2400 reimbursement: allowance Allowance DGM= Rs.2000 DM & above- Car permonth: Sr.Mgr & = Rs.3000/- p.m. Gr.IV& above(4 Mgr.= Rs.1800 For All- wheeler)= AM & DM = Scooter/motorcycle Rs.2115/- Rs.1500 = Rs. 1350/- p.m. for all grades(2 Executives = Rs Moped = Rs. Rs. wheeler)=Rs.480- 560 750/- p.m. 755/- for Conveyance shimoga/Tarikere allowance : NIL =Rs.14/-per day Night Shift upto Dy.Manager = NSA: Rs. 35/- per Allowances (NSA) Rs.35/- per night shift. shift Magazines/HRD NA A.O to D.M = Gr.I to VII = Allowances Rs.125/- Rs.150/-p.m. Manager to AGM For GM/ED/Dir. = = supply of two need based newspapers. DGM and above = supply of three newspapers. LTC/LLTC LTC can be LTC can be availed Gr-I = Rs.6125 availed once in once in two years. Gr-VI=Rs.9625 two years but no One month Gr-II= Rs.6565 encashment (Basic+DA) of Gr-VII=Rs.10500 LTC availed month Gr-III=Rs.7000 or actual expenses DGM=Rs.11375 whichever is less. Gr-IV=Rs.7875 GM =Rs.12250 Gr-V =Rs.8750 ED/Dir.=Rs.13125 Leave Encashment maximum to 300 maximum to 240 can encash upto days days 30 days PL at their credit every or 60 days PL at their credit once in a block year of 2 years. Washing NA NA NA Allowance Electricity /Water NA Electricity: Subsidies No. of units p.m. DGM & above = 300 AGM = 120 DM to Sr.Mgr = 90 Officers & A.M= 70 57 | P a g e
  • 65. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Asst. officer = 50 Family Planning grades have Rs. 2500/- (1 kg Incentive different rate of complan) amount. City compensatory NA Asst.officer = at Bangluru = allowance Rs.650/- Rs.125/-p.m. officer = Rs. 800/- at Regional office AM to Manager = = 150/-p.m. Rs. 1000/- Location based North-East NA allowance allowance: Payment of NEA @ 12.5% on basic pay will be made to executives serving in the Corporation’s establishments in Assam / NE Region only. Offsite allowance NA Intake well & NA Pugalur = Rs.350/- p.m other offsites & wind farm = Rs.700/-p.m Social Amenities & benefits HRA HRA is location Grade : At Bangluru = based: Branches other 15.75% of basic + City type 'X'= place PP 30% of basic pay AGM & above : Regioanal offices City type 'Y' = 35% 30% =21.50% of 20% of basic pay DM,Mgr & basic+PP City type 'Z' = Sr.Mgr: 30% 10% of basic pay 25% AO & AM : 25% 25% Education/ Tuition Rs.120 for each Children education For employee Fee child. allowance: reimbusement of A.O & officer = one proff. Inst. Rs.100/- p.m. per Subscription fee: child. For Gr.IV & V = A.M to D.M = 50% of Rs. 125/- p.m. per subscription fee child. paid. Mgr. & above = For Gr.VI & Rs. 150/- p.m per above= 100% of child subscription fee paid. 58 | P a g e
  • 66. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Housing Quarter is Quarter is provided at Bdtv. : provided as per as per the Furnished quarter the designation designation and on nominal rent and availability. availability. subjected to availability. Temporary accommodation will be provided in officers' Hostel. Medicals One month basic Medical salary for a year reimbusement: for domiciliary Gr.I to IV officers treatment full = 51% of basic+ reimbursement of PP hospitalization for Gr.V and above referral hospitals. = 56% of baisc + PP Uniform Every year two sets NA of uniform are issued to all employees. Funeral expenses Rs.3000 Rs. 5000/- Death Relief Fund A matching See the subtopic : Rs.60000/- under contribution "Insurance" MPM life cover limited to Rs scheme. 100/- per member contribution of unit. Retiral Benefits Insurance Group insurance: Group Group savings Rs 62000/- insurance:Premium linked insurance: fully paid by the Rs.40000/- company. In the (premium: Rs.40/- event of death, his p.m.) nominee will get Rs. 75000/- Personal accident Personal accident insurance insurance: coverage: for all premium fully paid officers = Rs.5 by company. In the lakh(50% of event of death, his premium p.a. will nominee will get be be borne by the 96 months' Basic + company). DA . PF/CPF 12% of basic + 12% of basic + DA 12% of basic + DA DA Gratuity Rs.10 lakh NA 15 days' salary for every complete Service 5 yr. 59 | P a g e
  • 67. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Medical Benefits / Post retirment NA Medical Facilities medical allowance:Rs 25/- benefits through p.m. medi-claim for Reimbursement : employee and on self vouchers spouse given rates per coverage Rs. 2 annum-: lakhs GrI to IV & MTs = 51% of basic pay Gr.V & above = 56% of basic pay Superannuation yet not decided NA 9% of basic pay Subscription/Benefit Any Other Items EBS NA Contribution NA Rs.165/- p.m with an annual increase of Rs. 10/- in every November. 60 | P a g e
  • 68. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 3. Percentage (%) of salary & wages to turnover Tamil Nadu Newsprint And Paper Limited In crore/ years 2005-06 2006-07 2007-08 2008-09 Sales 892.91 962.98 1070.38 1172.39 Compensation to 51.68 63.43 67.76 80.99 Employees % of salary & wages to 5.79 6.59 6.33 6.91 turnover % of sal. & wages to turnover 7.00 6.91 6.50 6.59 6.33 6.00 % of sal. & wages 5.79 to turnover 5.50 5.00 2005-06 2006-07 2007-08 2008-09 Figure 4: For TNPL Mysore Paper Mills Limited In crore/ years 2005-06 2006-07 2007-08 2008-09 Sales 378.78 419.88 402.59 431.5 Compensation to 68.98 67.11 82.95 70.42 Employees % of sal. & wages 18.2110988 15.983138 20.6040885 16.3198146 to turnover 61 | P a g e
  • 69. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ % of sal. & wages to turnover 25.00 20.00 20.60 18.21 15.00 15.98 16.32 10.00 % of sal. & wages to turnover 5.00 0.00 2005-06 2006-07 2007-08 2008-09 Figure 5: For MPM ltd. Hindustan Paper Corporation Limited In crore/ years 2005-06 2006-07 2007-08 2008-09 Sales 742.24 786.25 841.85 721.07 Compensation to 85.49 93.71 115.67 139.75 Employees % of salary & wage to 11.52 11.92 13.74 19.38 turnover % of sal. & wage to turnover 25.00 20.00 19.38 15.00 13.74 11.52 11.92 % of sal. & 10.00 wage to … 5.00 0.00 2005-06 2006-07 2007-08 2008-09 Figure 6: HPC Ltd. 62 | P a g e
  • 70. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Percentage of salary & wages to turnover signifies the ratio of expenditure on compensation and total sales of the company, it can be calculated by following formula:- % of salary & wages to turnover = [Compensation to Employees(Rs.) ÷ Sales (Rs.)] X 100 The ideal percentage(%)of salary and wages to turnover for a potentially rich company which is growing in nature should be within 7 to 11 percentage as per the industry’s norms. As we can analyze from the above graphs [figure-4,5,6] that TNPL has most appropriate ‘percentage of salary & wages to turnover’ in all the mentioned years i.e. from 2005 to2009 specially in 2008-09 it has approximately 7% which shows their stable compensation proportion with respect to their sales. Where as MPM Ltd. and HPC Ltd. are not in the good position because of having very high ‘ percentage of salary & wages’ to turnover during past few years. In the case of MPM ltd. at least they have succeeded to lower down their compensation to employees and a constant increment in sales. But in HPC ltd. the situation is not favorable for last 2 years because there is constant increment in Compensation to employees with low sales which is not a good signal for a company. 63 | P a g e
  • 71. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ 4. Employee Cost Per Tonne Tamil Nadu Newsprint And Paper Limited Years 2005-06 2006-07 2007-08 2008-09 Production (tonnes) 230079 231161 245471 254903 Compensation to 51.68 63.43 67.76 80.99 Employees(cr) Employee cost/tonne 2246 2744 2760 3177 Table 4: for TNPL Employee cost/tonne 3500 3000 2744 3177 2760 2500 2000 2246 1500 Emp. cost/tonne 1000 500 0 2005-062006-072007-082008-09 Figure 7: Employee cost/tone -TNPL Mysore Paper Mills Limited Years 2005-06 2006-07 2007-08 2008-09 Production (tonnes) 102681.1 116281.8 118403.7 109292.7 Compensation to 68.98 67.11 82.95 70.42 Employees(cr) Employee cost/tonne 6718 5571 7005 6443 Table 5: for MPM ltd. 64 | P a g e
  • 72. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Employee cost/tonne 8000 6718 7005 6000 6443 5571 4000 Emp.cost/tonne 2000 0 2005-06 2006-07 2007-08 2008-09 Figure 8: Employee cost/tone –MPM Ltd. Hindustan Paper Corporation Limited Years 2005-06 2006-07 2007-08 2008-09 Production (tonnes) 207068 208315 211746 175020 Compensation to Employees(cr) 85.49 93.71 115.67 139.75 Employee cost/tonne 4128 4498 5462 7984 Table 6: for HPC Ltd. Employee cost/tonne 10000 8000 7984 6000 4128 5462 4000 Emp. cost/tonne 4498 2000 0 2005-062006-072007-082008-09 Figure 9: Employee cost/tone –HPC Ltd. 65 | P a g e
  • 73. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Employee Cost Per tonne can be calculated by following formula :- Employee cost per tone = Compensation to employee ÷ Production To balance the employee cost with respect to production is very important for any company. As we can see from the above graphs (fig- 9,8,7) that TNPL and MPM Ltd. both are on a right track as their production is increasing with a slow pace of increment in compensation to employee as a result TNPL has been able balance w.r.to production and MPM ltd. has lower down its employee cost which must be beneficial for the company . Whereas, in case of HPC Ltd. their production has decreased and compensation to employees has increased drastically as a result employee cost per tone increased so much. 66 | P a g e
  • 74. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Conclusion After a careful study of the finding of this research we came to know following facts about Hindustan Paper Corporation Limited. They follow Graded Pay Structure From the comparison of Compensation Structure of all the three companies, HPC ltd. has best basic pay structure, allowances and incentives schemes for their employees/workmen. This analysis reveals that there is a big difference in ‘% Range’ between the lowest and highest grades eg. For workmen (W-1)120% and (W-9)158% to accommodate the employee drawing maximum Basic pay in the pre-revised pay scale in such a way that after fixation of pay in the revised pay structure they could continue to draw at least three annual increments. Percentage (%) of salary & wages to turnover is very high, approximately 19% (2008-09) which should be ideally 7% to11%, which is not a favorable situation. Employee Cost/tonne is also high and increasing day by day which is not at all good signal for the HPC ltd. in this competitive market. Though HPC Ltd. is paying very good salary to its employees/workers as compare to other companies and more employees oriented but it is a time to become a production oriented company. It has to take some sincere steps to limit ‘Percentage to salary & wages to turnover’ to less than 10% and to lower down ‘Employee cost/tonne’ otherwise, the salary and wages of the HPC Ltd. can not be absorbed by physical and financial performance of the company. 67 | P a g e
  • 75. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Recommendations Since, HPC Ltd. need to lower down its Employee cost so that the company can run smoothly with this compensation structure. As layoff of the employees is the best way to control the Employee Cost but being a public sector company HPC can’t follow the policy of layoffs. So, I would like to suggest some ways through which HPC Ltd. may come out from its current situation in future which are as follows:- HPC Ltd. should try to increase its sales and production (at least above 2,00,000 tonnes). Restrict recruitment only to scarce category i.e. pulp and Paper Tech. & Chemical Engg. Reduce personnel strength in non-cores area and if possible redeploy surplus manpower to cores area. Curtail expenditure on overtime engagement. Variable cost should be reduce to generate more revenue. HPC Ltd. should diversify its business in other areas example: Copy paper. HPC Ltd. can increase the proportion of variable pay (allowance/bonus/Incentives) and can decrease the proportion of fixed pay (basic). 68 | P a g e
  • 76. Comparative Analysis Of Compensation Structure Of HPC Ltd. viz-a-viz Other Companies From Paper Industry _____________________________________________________________________________________ Bibliography ltd., H. (2007). Memorandum of settlement of HPC Ltd. kolkata. mills, M. p. (2007). Memorandum of settlemet. Mysore. Mr.P.K.Adithian. (1986). Collective Bargaining Agreement. kolkata. Murlis, M. A. 1. Reward management (hand book) by Michael Armstrong and Helen Murlis[Authors. Mysore paper mills. (n.d.). Retrieved April 3rd, 2010, from http://www.mpm.co.in/ Mysore paper mills. (n.d.). Retrieved march 3rd, 2010, from http://www.mpm.co.in/ TNPL. (n.d.). Retrieved march 20th, 2010l, from http://www.tnpl.com/Index.aspx TNPL. (2006). memorandum of settlement TNPL. welcome to Hindustan paper corporation limited. (n.d.). Retrieved february 25th, 2010, from http://www.hindpaper.in/ welcome to the world of paper. (n.d.). Retrieved February 25th, 2010, from http://www.hindpaper.in/ wikipedia. (n.d.). Retrieved march 20th, 2010, from wikipedia: http://en.wikipedia.org/wiki/Executive_compensation wikipedia. (n.d.). Retrieved march 20th, 2010, from wikipedia: http://en.wikipedia.org/wiki/Workers%27_compensation 69 | P a g e