CategoriesEmployees Management

Salary payment to permanent employees on 1st of every month

Monthly Salary

We have been hiring frequently over the last few months in 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 in those policies here. Few of the policies suggested were

  • Bring daily allowance or food expense 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 has already been implemented (Food expenses to be excluded from Employees CTC) couple of months back. 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 7th of next month. The reasons were

  • Employees used to quit immediately after getting their salary and without serving notice period. Having 7 days of salary with the company would reduce such a behaviour
  • Calculation of 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

  • Loyalty they have shown towards the company so far is being valued
  • Company trusts them to behave like responsible employees
  • Help’s employees meet their financial commitments earlier by 1 week
  • Calculations and approvals can be done faster because of more refined and automated calculation process now
  • 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.


Food expenses to be excluded from Employees CTC

Company runs an in-house canteen to provide fresh and hygienically prepared food to its employees 3 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. To employees working in the sales team i.e. working on the field, food budget was included in their CTC.

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

Why was food expense part of CTC?

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

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

To sincerely take care of employees, management used to conduct employee satisfaction surveys to understand what aspects can be improved in its employee engagement. Employees only had negatives, all the positives done were simply taken for granted.

A few employees couldn’t wait till the month could end 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 was enough. Let us do our best and not care about whether it would please the employees. And 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 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 time 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 take home component increased
  • Compensation 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 are working with us for more than 7 years, are performing well and are taking ownership. So, we will further liberate the policies.

CategoriesEmployees Sales

How employees of earlier generation worked

Couple of days back, our Sales officer from Udupi quit within 2 weeks of joining. Because working for 8 hours a day was not feasible for him. And today, I met Mr. Mahalingeshwara Bhat, Area Sales Manager at Jyothy Labs Ltd at Mangaluru market. He narrated his story and this inspired me to write this post. We met for hardly 5 minutes, still his experience had a lot of wisdom for me.

He is now 55, past the retirement age at his company. He has maintained fitness levels to work in the market after traveling for an hour from Puttur. Working in the market, walking, talking is physically very demanding.

Jyothy Labs may be a billion dollar revenue blue chip company now, but when he joined way back in 1990, it was a small company. He is financially well off now, but at the time of joining his salary was 1,000 per month. His father was a small time cook. He and his company stuck to each other and grew together.

He worked for 32+ years and carried the brand he worked wherever he went. His friends used to call him Ujala Bhatru. He feels proud about it. Employees of these days, feel ashamed to wear work uniforms outside work and they don’t like to associate them with the company/brand outside.

He was assigned with the responsibility to set up the market at Gujarath in early 2000. That is recruit and train sales staff, appoint super stockists and distributors. It is very far from his native place, hardly gets to travel back and meet family. He didn’t even see his newly born son for a couple of months. Still he is happy about the opportunity and responsibility the company has given him. It took him figuratively and literally to places. These days employees consider is outside their scope to travel beyond their office place.

During 2002 Gujarath riots, he was locked at a lodging for 3 days without any food and then the lodging owner provided food prepared at his home. He didn’t get angry with the company for the situation he was in. He understood that it was a external situation that was beyond his or company’s control.

He has grown slowly and steadily within the company and is content about it. Being content with what we have is the real recipe for happiness. He must have seen people much younger to him, with Engineering or MBA degrees from premier institutes getting into higher positions or drawing higher salaries. He must have seen colleagues jumping across companies and getting short term growths. He must have seen various types of bosses during his long career.

He still has the gratitude for the company for providing his daily bread and all the progress he has made in his life. Through he is very right if he thinks, he got his bread for the effort he has put into company’s business.

Though we cannot expect the present generation of employees to work like earlier generation, it is worthwhile to observe how it was earlier.

Disclosure –
Murali M, Operations Head is his wife’s younger brother.
Tharanatha S, ASM was reporting to him 10 years back while he was working at Jyothy.


Trip to Mullaiyanagiri

From the company, we had organized a one day trip to Mullaiyanagiri for employees on Sunday, 8th June. 25 out of our 38 employees have been able to make it for the trip. 10 ladies and 15 gentlemen, their age ranging from 20 years to 55 years. Here, I like to summarize the facts and share my opinion on the trip.

After a hectic season ending this summer, we wanted to have a break from routine and have a relaxing session. The group otherwise formally organized with hierarchy, powers and responsibility, will now be informally organized with personal friendships and similar interests.

Usually in business operations it is me who takes final decisions or takes tough calls, where the buck finally stops. But for this trip, I had delegated the responsibility of organizing the trip to my younger colleagues and future leaders Nanda Kishore, Vinod and Shiva Kumar. They are trekking freaks themselves too. I only briefed them about the time duration – 1 day i. e. Sunday without affecting our regular work on Saturday and Monday, people – our employees only and not their families, place – scenic place nearby and budget – 800 per head. They went ahead, selected the place, went there one month in advance to understand the place, booked the bus, arranged for lodging and food, arranged to pickup and drop employees from far away places.

Though a few of us visit other places almost every weekend, for a few it was a once in lifetime, once in a blue moon kind of opportunity. One colleague remarked, for the first time since my college 10 years back, I am freaking out like this. For me, it was otherwise, I didn’t go out till I completed college as I was not allowed. The company management is very happy for providing them that opportunity and their gratitude in return.
Many of us know each other professionally but we don’t know each other personally. Those who are working in our branches at Mangalore and Sullia may not know those working at our factory at Puttur. This was a great chance to know each other and personally. I am surprised at how each of them have different personalities at work and outside work. Some of them who meekly obey orders from superiors at work, now participate freely.

We started from our factory at Puttur on Saturday night 10 p.m. picked up people along the way. Travelled through Charmadi ghats to reach Chikmagalur at 3 a.m. We checked into a lodge only to get fresh and complete our morning activities. They charged 100 per head for the same. Got ready by 6 a.m. Travelled to the base of mullayanagiri hill while enjoying hills, valleys, sunrise and panoramic view of chikmagalur city. Had breakfast at small canteen at base and started trekking to the mullayanagiri peak 4 kilometres away. Everybody enthusiastically marched along, playing many pranks along the way.

We saw many tourists like us that day since it was a Sunday. Being the highest point in Karnataka, it should certainly attract many visitors. We could see lush green mountains, green either with grass or trees. I observe that ghats that are on the western side of malnad have more trees and ghats on the easter side of malnad have more grass.

Mullayanagiri peak has a small temple on top. It also has a couple of caves where one go a decent length inside the hole of hardly 1 metro diameter. Such a cave experience was first time for me, for a claustrophobic, it can be quite an experience. Once can reach the top through well laid out steps, instead we climbed form the back side of the hill to reach the top to enjoy a full 360 degree view of other landscapes visible from top.

We started descending down at 10 a.m. Reached the base at 11 a.m. We had ordered for lunch at the same place where we had breakfast. Since we had to go to Bababudanagiri next and had nothing to do here, we had an early lunch at 12 p.m.

Mobile tower on top of Bababudganagiri is clearly visible and just a 2 hour trek from Mullayanagiri but along road one has to travel 20 kms. Road is still under construction, so we had to park our bus well before Duttapeeta and go by public Jeep. He also took us to another place 4 kms away with a small lake and view point. Finished that part of site seeing by 3 p.m. and it was time to come back.

Weather was excellent for site seeing. It was bright and sunny, there were no clouds so far off places were visible. There was no rain, so cameras could be taken out without fear. Rainy season is yet to arrive formally, so all the streams and rivers were with no water. At that altitude, humidity was low, so unlike in Puttur/Mangalore where we would sweat profusely without doing anything, there we were not sweating at all. it made it that much easy that we were trekking easily even under mid-day sun. But when we were heading back after Mudigere along Charmadi ghat rains had come and it stopped us from enjoying the breathtaking views of the ghats. While going up the ghats we couldn’t see because it was night, while coming back it was rains. Can’t complain about it when we chose to travel in rainy season.

Dinner was ordered at Suprabha’s uncle’s place at Somanthadka off Ujire. Thanks to their family for arranging it. After dinner at 8 p.m. we reached Puttur at 9.30. People were dropped to their respective places by 10.30. A satisfying and pleasurable trip comes to an end. Bad thing being, People had to come back to work on Monday as usual after this.

Thanks to the organizers who made the trip such a jolly ride without hiccups. I would like to highlight their responsibility and sacrifices. After such a tiring journey, they dropped people to heir home with their personal vehicles. They gave away the best opportunities to us while they took away what was left. On a 22 seater bus, they sat near the driver, didn’t sleep for a moment in their entire night journey. They freshened themselves up at the bus-stand while rest of us did it at lodge to save time for us. They came first and went back last. Not many appreciate them for the good things they have done, but any shortcomings are immediately observed and mentioned. It is not easy to hold 25 people together throughout the journey and make everybody happy, but they did it. This will give them a good experience of how to lead in their organizational duties in times to come.

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What is the Salary?

Cocoguru has now grown to a 25 member organization, with immediate plans to increase the size to 35. When it started operations a year ago, it was about selecting whoever was willing to work with us, without regard to their skills and attitude. We were lucky to get a few good people, and few of them were groomed to be disciplined and develop a sense of ownership towards their roles. Now, with the base set, we will select more people selectively. In this post, I discuss about my experiences/frustrations with those selections and expectations from candidates. It is a mighty challenge to get good people to work for a startup especially in a rural area.

In the job advertisements, we would mention the company name, address, working location, vacancy position, qualification, contact details, few times salary range also. Candidates will do well to observe the details carefully before applying. Rather what we see is that they apply blindly and then back out during later stages of selection process due to the very facts already disclosed to them. Good candidates visit the website, find out the company’s product offerings, perform background checks with references, sometimes with existing employees, visualise themselves working here for a long term.

The classic opening question
The job market has tilted so decisively towards sellers i.e. employees that they start calling the shots. This is how a conversation begins
Candidate – “Is this Cocoguru?” (Many times they don’t even bother to pronounce the name)
Me – “Yes, Sir”
Candidate – “You have advertised for a vacancy, right?”
Me – “Yeah, Right”
Candidate – In either a disinterested tone or rude tone, he then asks “What is the salary?”!!!
Me – Unhappy that the discussion is entirely off-direction, I ask “How much do you expect?”
There goes the conversion meaninglessly, each one trying to defend his ego and finally ending the conversation in a bitter manner. The classic opening question leads to an immediate conclusion.

In my theory, money is not everything as it is made out to be. It is merely a currency of “value”. Businesses should make good profits to reflect the value they create to its customers. Employees should take home good salaries for doing a valueable work for the company. Focus should be on creating value and money will follow.

In the above example we have seen how bad the conversation went. Instead it could be much more fruitful, if it went in the following lines
Candidate – “Hello, my name is Vaibhav, I saw your advertisement in today’s Suddi Bidugade, and I am interested in applying for the position of Sales Executive”.
Me – “Okay. Good. Tell us more about yourselves.”
Candidate – “I am from Sentyar, a B.Com graduate, having 6 years of experiece in Line Sales, last 4 years with Dash Marketing Agency selling ITC cigarretes in and around Puttur, Sullia and Subramanya.”
Me – “Why do you want to leave your present job, when it is so easy to sell cigarretes where demand is more than supply that too for a brand like ITC?”
Candidate – “I am liking my job as it is giving me opportunities to meet new people and I have developed good relations with a few retailers. I am only looking for better prospects.”
It would be blunder to say something like “Cigerrate is injurious to health, but Coconut Oil is good for health.” Because we know, you are looking to change for your own benefit and not for our benefit or that of people’s health at large. It will only prove that you are lier.
Me – “How do you plan to increase our sales?”
Candidate – “Sir, what is your present distribution setup? What places do you cover?”
Here, the candidate has not only given a overview of himself, but also has shown keen interest to know more about the company and the job he is going to do.

Brain Drain
Dakshina Kannada is a district that has so many bright talents and great educational institutions. So many top ranks in SSLC, PUC, CET etc go to them. Result percentage is also highest perennially in Dakshina Kannada. But they migrate to cities like Bangalore, Mumbai, Pune, Gulf and America. For all the talent they have, they are happy to work for someone outside. They don’t take risk to build a dream company at home or work for someone who wants to build such a company here (read Cocoguru ☺). It is right if suitable opportunities are not available here, but to squander them when available is bad. Only salaries are compared between 2 opportunities in Bangalore and here. Luxury of being at home with family, lesser travel to work place, staying away from hustle bustle busy city life and much lower cost of living are not considered in the decision making equation.

Influence from a well known person may help get a job in government sector, where performance and results don’t matter. Some candidates who are otherwise not worthy of the job, try to have influence in their selection. Will that influential person be responsible for what the candidate delivers in the job? No, rather he threatens us with negative consequences when he is not selected.

Fixed Salary, Routine Job
Since we have only seen the candidate once and at most had an interview. It will be difficult to determine his worth for the company. So, we place him on probation for a lesser salary, with the intention of increasing it to generous levels once he proves him selves and is made permanent. Even once he is permanent, there will be periodic Appraisals to review his performance and salaries will be increased inline with his performance. Sadly, the candidates don’t think long term, they only compare the salary during probation and assume it to be his lifelong income. Similarly, he has fixed his skill set to what he has acquired till now, without any aim of acquiring new skills on the job. He comes to office with the intention of performing routine jobs where Standard Operating Procedures (SOPs) are defined. Anything beyond the routine takes him completely off-guard.

Office Work vs Field Work
The number of enquiries for office work like Accounting far exceeds that of field work like Sales. Logically, hard work gets paid lot more than easy work. A sales man when he exceeds his targets gets more money in the form of commission. An accountant can at best get his annual bonus on superior performance. When we opened our factory last year for operations, about 50 ladies from nearby areas walked in looking for easy packing kind of jobs under a factory roof. They were willing to work for as low as 80 Rupees per day. The same people are not willing to work in a nearby farm for 250 Rupees a day. Not only about the nature of work but it is also a question of their prestige. They perceive Factory job to be a lot more prestigious than agricultural or household work.