cavinkare private limited salary revision 09 10
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CavinKare Private Limited Salary Revision 09 10. FAQs. HRD 17 07 2009. Coverage. Slide 3 - Objective Slides 4 to 17 – Details specific to Performance Review and annual revision 09 10 Slides 19 to 34 – General queries on Process of annual revision, increment and promotions. Objective.

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Slide 3 - Objective

Slides 4 to 17 – Details specific to Performance Review and annual revision 09 10

Slides 19 to 34 – General queries on Process of annual revision, increment and promotions

  • To clarify annual salary revision related queries to employees in the company.
  • To explain the processes followed and decision points to employees
        • This presentation is done on a FAQ model.
no of employees in various performance quadrant
No of employees in various performance quadrant

Out of 567 employees considered for increments, 302 are

in above average performance quadrant (53%)

of employees in various performance quadrant
% of employees in various performance quadrant

53% of employees in above average performance quadrants


Overall salary increase for 567 employees in all Bands excluding Associates is 14%.

Band 2 and 1- Average increase on salary is 12.35%. Whereas variable pay on CTC now has been increased from 13% - 16% to around 22% to 27% and linked directly to top line and bottom line achievement.

Band 3 – Variable revised from current 16.6% to 17% on CTC

why this year s increment is comparatively lower than earlier
Why this year’s increment is comparatively lower than earlier?

Out of 567 employees who received increments, 135 employees are new (1st Appraisal taken this year). Hence they got pro-rata increments in their respective performance quadrant.

All positions in the company were compared with 50th percentile in the industry

An attempt was made to take all Critical positions in the company above 60th percentile.

Those positions already paid far above 50th percentile were given lesser increase

Otherwise performance quadrant wise increment given this year is the same as in the past

Does the higher increase to senior levels is due to majority of senior levels in higher performance quadrant ?

This chart explains that employees in each band is uniformly spread

across 4 performance quadrants

First line of X axis refers to different quadrants

Second line of X axis refers to the various Job bands

Third line of X axis refers to total number of employees in each quadrant

why is average increment is different for different bands
Why is Average increment % is different for different bands?

Increment % is same irrespective of job bands.

Increment % is based on performance quadrants across bands

Additional adjustments were given to critical positions in managerial levels and functions based on market premium.

For SR, lump sum amount is given as monthly increase based on performance quadrants.

Majority of the employees in lower bands were new and hence the variation is majorly due to proportionate pay for the period they worked during the last fiscal.

Few adjustments were given to officer level position based on market value.

why increase in basic salary is not in tandem with increase in ctc for some employees
Why increase in basic salary is not in tandem with increase in CTC for some employees?

Increase in Salary for Band 1 & 2 given on variables. Similarly for officers increase is given on take home.

Retiral benefits like PF, gratuity are based on basic salary. Any increase in basic would lead to cut in take home portion since certain % of increase would go to contribution to retiral benefits.

Currently in Band 6, the percentage of Basic to CTC is comparatively higher than the market in our organisation. Due to this higher basic salary to CTC at Officer level, it is impacting when they get promoted to Managerial level where majority of the salary components are fixed on annual basis.

HRA % increased from 40% to 50% for Officers and Sr. Officers and made take home more tax friendly. HRA up to 50% of basic is exempted from tax

Compensation surveys across show that today’s youngsters prefer more take home than retiral benefits. Hence going forward, we will increase other components of salary in monthly take home and only min increase would be given on Basic salary.

why is there no increase on basic salary for some despite promotion
Why is there no increase on basic salary for some despite promotion?

Compensation structure is unique to each grade and there are fixed allowances, perks, bonus, for each grade.

Hence employees moving from one job level to another would face the following issue:

  • Officers getting promoted to Asst Manager will have an impact on their basic since few of their salary component is converted to components like annual Perks, annual Performance Incentive, etc.
  • However, they have flexibility to make claims anytime during the year based on bills. This is more tax friendly as reimbursements are tax exempted.
  • Normally salaries for managers are fixed on annual basis as they impact result over a longer period than junior levels.
despite performance why some employees not given increment based on their respective quadrant
Despite performance why some employees not given increment based on their respective quadrant

It happens some time the position holder continues to be in the same job for long and outgrows the position/job. Being in the same job they will be an expert but that does not qualify them to get the best increment %

Every job is budgeted and cost attached. Costing of job is done based on its importance, criticality and market attraction. There is a salary band for each grade to ensure fair price for the job.

If employee has reached the maximum salary in that band then he/ she is given only the min increment. This is known as capping, and is done to ensure that performance improves with time that an employee spends in the organization.

Increment is given based on individual’s performance and considering the cost of the job. Otherwise it will not challenge the position holder to look at growing in hierarchy and will make them complacent as they are paid higher for the job than it required.

Such a case the increment would be only the minimum based on inflation. Such employees are given min 7% irrespective of their appraisal score or the time spent in the organization. This will put pressure in the system to ensure that both job and position holder are growing in the organisation.

how can the job grow
How can the job grow?

Individual takes more / additional responsibilities and there by increase the width and depth of the job

Employees look at automating or eliminating jobs that do not require human intervention and thus look at more value adding jobs.

Rationalisation of manpower number happens and thereby people doing the same job is reduced over a period and thus individual holder will become responsible for more responsibilities than earlier.

Quality of job and quality of job holder increases and there by their market value and hence their pay.

Many established organisation employees question the logic of new positions created in their department and how it impact their job, and relationship to the new positions.

why differential salary for mts this year
Why differential salary for MTs this year?

MTs are recruited from campuses based on the salaries offered at that campus by various companies.

Last year CKPL recruited from two different tiers of management institutes and offered differential salaries.

Upon placement within the company, all MTs do the same job, hence we have looked at narrowing the gap in salaries based on their performance criteria.

Those MTs from tier II management institutes who have done exceptionally well and demonstrated potential were given significant adjustments and others were given lesser adjustment in addition to their increment, thereby narrowing the difference in their salaries.

performance score of employees less than one year service with ckpl
Performance score of employees less than one year service with CKPL

There is a significant improvement in score year after year amongst

new employees


This chart compares the average score of employees above 2 yrs service against 2 and below. Though there is no significant difference between them, the trend line shows that the average score of New comers are constantly moving up and they have bettered their performance compared to experienced employees in CKPL. Last appraisal new recruits have scored better than experienced Employees.

Is it an indication that new talents are performing better than existing?


What is the criteria for increments?

  • Employees should have completed the on-line Performance review.
  • The Reviewer’s absolute score generated by the system taken for calculations.
  • Function / Superior wise Performance Quadrant fitment details of employees

What is the process in deciding Increments in the company ?

  • Respective FH present the scores of their department and fit them in 4 quadrants.
  • Overall increment % and quadrant wise increment is approved by the top management
  • Employees across the company based on their performance quadrant are given the predetermined increment.


How are employees fitted to different quadrants ? Who decides it?

  • 4 quadrants are classified as quadrant I being the bottom performers and quadrant IV being the top performers.
  • From the total number of employees as a thumb rule, first 10% of the scores sorted will be in quadrant one, next 40% in quadrant two, next 40% in quadrant three and the last 10% will be in quadrant four.
  • Employees are force fitted in to different quadrant based on their performance review score.
  • It is done Function wise, where the FH proposes based on the range of scores in the respective function
  • Steering committee constituted for this purpose goes through it and approves it.
  • Steering committee members this year includes CK Ranganthan, TD Mohan, Ramesh Viswanathan and Oommen Abraham.

Performance quadrant fitment

For eg. There are 12 employees in one dept. Their annual scores are sorted on descending order.

This dept average score is around 75. Hence 75 is in quadrant 2.

Employees are force fitted based on their absolute score. Quadrant fitment is done for managers separately and officers separately based on the range of average score as shown above in two different colours. At times it happens for a decimal score difference, you may get in to different quadrant



What determines the overall average increase in increments every year for the company ?

  • Various compensation benchmark survey reports, industry projections as reported in various media and internal cost structuring would decide the % increase.
  • Salary data of other companies from consultants, which is again validated during personal interviews with candidates.
  • Previous year’s top line and bottom line growth.
  • Company’s future growth plan.
  • Market condition and retention plan
  • Promotion means the movement of an employee to a higher grade or pay band
  • The purpose of the promotion is to provide greater opportunities for career prospects to employees.

How is promotion of an employee decided ?

  • Promotions are recommended based on the following:
    • Consistent performance over a period of time (say 3 yrs)
    • Potential / capability to handle higher responsibilities as assessed by their demonstrated competencies in their current job.
    • Competency assessment. (This year all promotees have taken the ECHO assessment.)
    • Vacancy at higher level.
    • As part of career progression plan.
    • Grade promotions with in the same band are sometimes given to recognize meritorious service though there is no change in the existing job responsibilities. Eg: Officer to Sr. Officer.
  • Promotion Process:
    • Based on the criteria for promotions, FH proposes the Promotion list with details in the stipulated form and the steering committee goes through and gives it’s recommendations. HR validates the data with past history, impact of such promotions on others in same and other functions and forward to CMD for approval.

Is there any minimum period for being considered for promotion?

  • Only to those who are consistent in their performance in their current job and have potential for higher grade job.
  • Promotions are considered when there is a vacancy at higher level.
  • Consistent performance in the last few years.
  • Promotion to managerial levels based on demonstration of managerial competencies over a period of time.
  • Promotions are normally considered only after completion of probation. To minimize disrupting turnover in positions, employees are required to remain in their current position for a minimum of six months and have completed their probationary period, before they are considered for promotion to another position.
  • The above means that an individual has to spend some reasonable time in one job to be assessed on their demonstrated behaviours and potential for next level.

Then why are promotions to many refused stating minimum period like 2 to 3 yrs in one job ?

  • As a thumb rule we do have the following :
    • Min 2 yrs from last promotion for those who have the min professional qualification for the proposed position.
    • Min 3 years from last promotion for those who do not have the min professional qualification for the proposed position.
    • However, the above minimum period may be waived in the best interest of the organization based on vacancy at higher level existing and readiness of candidate internally.

Why then some employees who have completed 2 or 3 years in one job not given promotion ?

  • Min period do not guarantee promotion on completion of that period. Promotions are done based on the conditions stated earlier.

Why few employees are given promotions during mid of the year?

  • Interim promotions are done based on vacancy and candidate readiness as per the career path presented by FH.

What is interim Promotion?

  • Normally promotions are announced along with annual salary revision after the annual appraisals.
  • Interim promotions are announced mid of the year after half yearly appraisals in September based on business exigency.
  • Same promotion process like Promotion recommendation, career path is followed for interim promotions also.

Is there any restriction on maximum number of promotions in a year?

  • In the Year (06 07) we have promoted 60 during annual revision and interim 4.
  • In the year (07 08) we have promoted 63 during annual revision.
  • In the year (08 09) we have promoted 60 during annual revision
  • Around 10 to 12% promotions in a year is considered as great in the industry.
  • This year around 58 promotions out of 567 employees. Again out of 567 employees, 135 are less than one year and 66 less are than 2 years service with us ie overall 201 employees less than 2 yrs service with the company.
  • Effectively promotions this year is around 16% amongst employees with service of 2 and above years with CKPL

How come few employees getting promoted faster than the others?

  • Purely based on their merit, performance, results and potential
  • Majority demonstrate the potential to handle their immediate next level job.
  • Whereas few show promise of handling 2 or 3 levels higher jobs. Such employees are called fast trackers and they move faster in the hierarchy.

If there are more than one candidate available internally for the same next level position, what is the basis for promotion?

  • Incase there are more than one candidate available for the position, all of them are given equal opportunity to go through selection process for the new job.
  • All the prospective candidates are called for a personal interview at HO. Though potentials are assessed in promotion process, when there are more candidates, their past performances and ratings play a vital role in decision making.

Promotion seems to be subjective than objective?

  • Like recruitment it is a managerial judgment, the only difference is that you have more data internally available to support your decision.
  • The process and rules help in avoiding subjectivity in decision making however it cannot be avoided fully. There is more than one person involved in the process and hence chances of bias is avoided
how is annual salary components such as lta calculated
How is annual salary components such as LTA calculated ?
  • Salary mentioned in the revision letter is for a year from June to May next year.
  • Whereas treatment of Income for the year will be based on Fiscal year basis for IT purposes. Accordingly eligibility will be defined in Ramco Payroll.
  • Illustration:
    • LTA for the year 2006 07 Rs. 60000 (June to May)
    • LTA for the year 2007 08 Rs. 80000 (June to May)
    • The eligibility amount in Ramco for the year 2007 08 (April to March) would be
      • 60000/12 * 2 = Rs. 10000
      • 80000/12 * 10 = Rs.66666
      • Eligibility for 2007 08 for IT purpose would be Rs.76666/- only
      • Incase employee submits claims for Rs.80000, the difference between 80000 and 76666 ie 3334 would be treated as advance to employee.
  • The above logic applies to other annual components such as Perquisite Basket, Medical, etc.
what is the basis for calculating performance incentive for managers
What is the basis for calculating Performance Incentive for Managers?
  • Performance Incentive is calculated as per the Performance Incentive Policy of the company.
  • Performance Incentive to Managers in Band 4 & 5 were paid based on their achievement score against the Incentive parameters.
  • Performance Incentive for managers in Band 3 and above - the factors considered are individual incentive parameter, company’s top line and bottom line achievement
In the increment letter it is mentioned that there will be a change in the Performance Incentive Policy?
  • Performance incentive metrics for the year 09 10 would be as follows:
    • Band 3 and above: Achievement % of Company’s top line and bottom line. Each will have 50% weightage.
    • Band 4 & 5: Achievement % of Company’s top line and bottom line with weightage of 40% each and 20% weightage for Individual KRA achievement.
    • Detailed policy will be circulated.
    • There will not be any separate incentive metrics unlike last year.
why is differential treatment given to different function in terms of increment and adjustments
Why is differential treatment given to different function in terms of increment and adjustments ?
  • Adjustments are normally considered to bridge the gap based on Market rate for the position. In reality few functions command better market price or few functions grow faster than others and hence they need differential treatment.
  • However adjustments will be uniform within the same function and grade. It varies between function and grade.
  • Each position is benchmarked against the 50th percentile in the FMCG industry.

We do not encourage any exceptions in the whole process and all hikes are based on the logic built for the respective function, grade and salary band.

are we too rule bounded in terms of increments and promotions
Are we too rule bounded in terms of increments and promotions ?
  • There is no organization without rules, it does not mean that rules run the organization. Most of the things go by the rules and exceptions are done in the best interest of the organization. Any exception has to be approved by CMD of our group.
  • Though many agree that long distance trains run late most of the time, nobody suggests let the railway run with out time schedule. Imagine the status if there is no time schedule for Railways. I believe it is something similar to the promotion guidelines in the organization.
  • Policies are to create transparency and to ensure fairness. Absence of it at times can be chaotic.

You may feel free to send your queries to

HR department

Your feedback and suggestions are welcome.

Thank you

Oommen Abraham

[email protected]


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