Dear Friends,My company(IT) wants to do a Pay Cut for Employees during coming appraisal. This is only because there is order from our HQ (as its an MNC) that we need to cut the cost of Operations in India else will be shut down. As Indian Management doesnt want to shut down the company as well as not willing to layoff any employee - they are seeking suggestion on how to do the Pay Cut for employees ?Options are like 5% flat salary cut to all levles, which is very simple but also thinking on making the employees to take compulsory leave without Pay.My Question is - When there are other leaves ( CL and PL ) available to employee - Is it leagle to do LOP ? Is there any Law which says when to take Leave on LOP ? Or Is it just Industrial standard of making LOP when there is no other leaves available. Experts Please clarify.I saw some other posts in the same citehr advicing - to take compulsory leave with LOP ? Is it possible for any company to make such rule to handle crisis ?Regards,Jyothi</p>
From India, Bangalore
2From India, Bangalore
Dear Friend,
In the name of recession corporates start cutting cost. We basically at HR has no clue to the financial data. If top management says cut the cost then first thing we see is manpower cost. However there are other cost which disabled financial results but gone unnoticed.
As a prudent HR-Manager you have other options to convince your management before you touch the manpower cost as a last resort.
Take ratio analysis (YOY realization and manpower cost, other operating cost) then decide what is to be done.
Take ratio analysis of (YOY realization and manpower cost of Junior / Middle / Senior Management with reference to the revenue / realization).
There are various ways and means to cut the cost.
Did your management apply Value Driver analysis to identify manpower cost has major impact on your profitability.
Did your management identify what are the CSF's of your business.
Please don't ever touch the manpower cost unless you get convinced yourself that yes it is needed. For any help please get in touch.
From India, Bangalore
In the name of recession corporates start cutting cost. We basically at HR has no clue to the financial data. If top management says cut the cost then first thing we see is manpower cost. However there are other cost which disabled financial results but gone unnoticed.
As a prudent HR-Manager you have other options to convince your management before you touch the manpower cost as a last resort.
Take ratio analysis (YOY realization and manpower cost, other operating cost) then decide what is to be done.
Take ratio analysis of (YOY realization and manpower cost of Junior / Middle / Senior Management with reference to the revenue / realization).
There are various ways and means to cut the cost.
Did your management apply Value Driver analysis to identify manpower cost has major impact on your profitability.
Did your management identify what are the CSF's of your business.
Please don't ever touch the manpower cost unless you get convinced yourself that yes it is needed. For any help please get in touch.
From India, Bangalore
Hi Thanks for the quick responce. Yes already its the last stage of saving company and people being layed off. All other measures are taken since there is a major hit on the Sales, Top Management has already shut down 2 units in other countries and saying others to cut the cost upto 50% in the present expense. Since we have already done other cost cuttings this is the last step which we would like to take Amicably. Please suggest how to do the Pay Cuts without much hurting the Sentiments of the Employees. We value each employee over here, so dont want to send anybody home instead would like to share the loss equally or more cut for top salaried people and less cut for others. I also noticed that if we do the Pay Cut with percentage in the employees salary, During the time of hike(later) top management may bring to the same salary level that the people are drawing today. So thought of LOP without actually decreasing the pay on the papers to safeguard employees later interest. Please suggest is this Legal ? Is there any Law which speaks about how to do Leave without Pay ? OR shall we go ahead like this plan ?Regards,Jyothi
From India, Bangalore
From India, Bangalore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Cost Cutting-Recessi on![1].ppt
Cost Cutting Chair.jpg
COST CUTTING STRATEGY Nov 07.pdf