The company runs an in-house canteen to provide fresh and hygienically prepared food to its employees three times a day during working hours. However, the cost of serving food was budgeted and included in an employee’s CTC. Actual expenses were deducted while paying monthly salary. The food budget was included in their CTC for employees working in the sales team, i.e., working in the field.

Starting in December 2021, the company has decided to bear the cost of food and not include it in employees’ CTC. Permanent sales employees will be given a daily allowance. This is good news for employees as their take-home component increases.

Why was food expense part of CTC?
Initially, employees were always dissatisfied with the perks offered. They complained that they were unfairly compared with those of other firms locally. They did not realise the non-cash benefits the company offered, like ESI, PF, food at the canteen, paid leaves, etc. They only compared the take-home component with other firms that didn’t offer any benefits but only cash. Management tried to convince, but employees refused to acknowledge.

Initially, the canteen’s food was free and not included in CTC. Then, employees had issues with the quality of the food given and carelessly wasted food.

Management conducted employee satisfaction surveys to sincerely care for employees to understand what aspects of employee engagement could be improved. Employees only had negatives; all the positives were simply taken for granted.

A few employees couldn’t wait until the end of the month and wanted payments in advance, while the company itself had taken a huge loan to fund the project and working capital.

It was difficult to satisfy employees and smoothly carry out operations. Management thought, “Enough is enough. Let us do our best and not care about whether it would please the employees.” The following employee policy decisions were taken.

• All the benefits given would be quantified and included in CTC
• No salary advance
• No employee satisfaction surveys
• Salary revision only after the annual appraisal
• No scope for salary negotiation at all; if you are satisfied, stay else, quit

Few employees stayed and got new employees to join with these terms. As employees stayed and performed, policies were made liberal.

• Start time changed from 8:30 am to 9:00 to reduce working hours by 30 minutes
• Festival holidays 10 days in a year given company-wide was excluded from CTC
• 1 hour is given in the afternoon to allow employees to attend functions once in a while
• Though ESI share fell from 6.75% to 4%, CTC was not changed, so the take-home component increased
• Compensation is given above market standards
• Though CTC was increased by a certain % every year, the food budget remained constant for the last 7-8 years.
• Bonus on profitability, given extra every 6 months

Now, we have many employees who have been with us for more than 7 years, are performing well, and are taking ownership. So, we will further liberate the policies.