Food expenses to be excluded from Employees CTC

Cocoguru Team

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.

Leave a Reply

Your email address will not be published. Required fields are marked *