Over the last few months, we have frequently been hiring for sales roles. New joiners would have worked in blue-chip companies earlier. Some of their company policies will be very employee-friendly. Having an open mind and progressive attitude, Cocoguru management would like to bring those policies here. A few of the guidelines suggested were

• Bring daily allowance or food expenses outside the employee Cost-to-company (CTC) calculation.
• Make salary payments immediately after the end of the month
• Bring paid leave value outside the CTC

The first suggestion (Food expenses to be excluded from Employees’ CTC) was implemented a couple of months ago. The second suggestion is set to be implemented now. The third suggestion is being considered but not decided.

Till now, salary payments used to happen on the 7th of the following month. The reasons were

• Employees used to quit immediately after getting their salary and without serving a notice period. Having 7 days of salary with the company would reduce such behaviour.
• Calculating salary and approvals takes some time, though done through spreadsheets, it requires gathering data like attendance, commission and incentives.
• Reduces the company’s working capital requirement to the extent of 1 week’s salary

Now, we are paying salaries immediately to permanent employees because

• The loyalty they have shown towards the company so far is being valued
• The company trusts them to behave like responsible employees
• Help employees meet their financial commitments earlier by 1 week
• Calculations and approvals can be done faster because of the more refined and automated calculation process now
• The company’s improved financial position means it can afford the necessary working capital

However, employees under probation will continue to get their salaries on the 7th.

I had been to Kalasa, Chikkamagaluru for developing our business there. While I was talking to a famous coffee maker Varamahalakshmi Coffee Works, he asked me how is that your coconut oil last much longer compared to other coconut oils? It was a great opportunity for me to highlight how different and superior Cocoguru coconut oil is compared to other coconut oils. Since he was curious, he listened carefully. Normally retailers don’t care, we rarely get to explain, if at all we get, they hardly listen. These are the factors which I explained

1. Copra making method
Copra is made from coconuts in 2 methods. 

a. Fresh copra
Here fresh coconut is cut into two and immediately sun dried to get copra. This method is followed in coastal Karnataka and Kerala during summer and Tamil Nadu. Because of its freshness it would have undergone minimal deterioration.

b. Ball copra
Coconut with shell and husk is kept in attic for a long time to let coconut water in it slowly dry. After 6 months, moisture would have evaporated and kernel inside would become like a ball and separated from the shell. This type of copra popularly called as Tiptur edible ball copra is used for direct consumption. This method is used in Deccan platue regions of Karnataka. Those that are not in regular shape and size is used for oil milling purpose. Since the copra has become old, it would have undergone some deterioration. Milling copra is selected after selecting edible copra.

To make Cocoguru coconut oil only copra made from sun drying of fresh coconuts are used.

2. Copra Segregation
Copra is segregated to select only good quality ones and bad quality ones are separated. Only good quality copra gives good quality oil despite the best of processes further.

3. Copra drying
Moisture causes rancidity in cooking oil. So, moisture is removed by drying copra using hot air before oil extraction.

4. Copra roasting
Copra roasting further removes moisture and sterilises copra.

5. Oil Extraction
Coconut oil is normally extracted from copra in 2 types of machines, rotary and expeller.

a. Rotary
In rotary machine, copra with 8% moisture is crushed in a rotary machine, oil is then filtered by sedimentation in barrels for 7 days.

b. Expeller
In expeller, copra with 2.5% moisture is crushed in an expeller, oil is then filtered online through filter press.

Cocoguru coconut oil is extracted from dried copra using expeller and filtered through filter press. Popular perception is that oil that is cold pressed/wood pressed/rotary crushed is natural and superior, also it looks white/colourless. It is suitable only for immediate consumption and yet very ineffecient. Oil yield is low, moisture causes rancidity. Roasted coconut oil extracted through expeller is long lasting, safe, aromatic and tasty yet retains natural properties.

6. Fine filtering
Filtering removes solid particles and moisture, when done finely and thoroughly, it improves oil appearance and shelf life. At Cocoguru, coconut oil is double filtered.

7. Tight packaging
Packing is a way to hold, protect, carry and exhibit the oil. When done well, it goes a long way in ensuring shelf life and convenience of use. In our case shelf life increases from 6 months in PET bottles to 12 months in Jerry Cans.

8. Inventory management
We carefully manage stocks at manufacturing, distribution and retailer points to ensure the stocks are fresh and in good condition, so that consumers get fresh stock.

Overall, it is about careful taking care of each aspect of manufacturing and business process, not about chemicals and preservatives. For many manufacturers their scope ends when their products reach the wholesalers, for us it is about consumer experience.

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.