What short term and long term initiative should be taken in determining total compensation to ensure good team work and high motivation in the Sri City factory for years to come?
What short term and long term initiative should be taken in determining total compensation to ensure good team work and high motivation in the Sri City factory for years to come?
What short term and long term initiative should be taken in determining total compensation to ensure good team work and high motivation in the Sri City factory for years to come?
EXHIBIT 1: COLGATE PALMOLIVE INDIA LIMITED PROFIT AND LOSS STATEMENT (IN ₹ MILLIONS)
Employee Benefits Expense
2,156
Finance Costs
15
Depreciation and Amortization Expenses
393
Other Expenses
8,488
Total Expenses
21,555
Profit before Tax
5,884
Tax Expense
Current Tax
1,371
Deferred Tax
47
Total Tax Expense
1,419
Profit after Tax
4,464
For the Year Ended March 31, 2012
Revenue from Operations (Gross)
28,055
Less: Excise Duty
(1,123)
Revenue from Operations (Net)
26,932
Other Income
506
Total (Revenue from Operations (Net) and Other Income)
27,439
Expenses
Cost of Materials Consumed
8,938
Purchase of Stock-in-Trade
1,197
Changes in Inventories of Finished Goods, Work-in-Progress, and Stock-in-Trade
(433)
this is the last portion of my question.
What short term and long term initiative should be taken in determining total compensation to ensure good team work and high motivation in the Sri City factory for years to come?
Transcribed Image Text:Colgate-Palmolive team, however, employees needed the right technical expertise as well as suitable
communication skills.
Suitable employees were currently working for different but related companies, such as companies that
produced plastic moulding for auto components or bottle making. However, the location of the factory, in
southern India, made it particularly difficult to attract talented workers from other parts of the country.
Singh found that highly skilled employees were reluctant to travel to southern cities in India, mainly because
of language issues. Hindi was widely spoken across most of India, but it was not prevalent in the southern
regions. Therefore, a Hindi-speaking plant supervisor would have trouble communicating with local
workers in the factory.
Another challenge regarding attracting good workers to the plant was the state requirement for local hiring.
Although the plant's location was technically in the state of Andhra Pradesh, it was only 10 kilometres from
neighbouring Tamil Nadu and not very far (75 kilometres) from its capital city of Chennai, a strong potential
source of workers. These workers could be considered local, even though they lived in another state.
Prafulla Bargaje, the head of human resources for Colgate-Palmolive's supply chain, had stated that the
company's practice was to hire local labour for its plants. In this case, however, it was unclear what
geographical boundaries constituted of the plant's local area.
Most of the unskilled labourers in the factory were likely to come from the company's own state of Andhra
Pradesh. These workers would be predominantly Telugu-speaking employees. Most of the technical and
supervisory staff, on the other hand, would likely be from nearby metropolitan Chennai, and would be
predominantly Tamil-speaking employees. Therefore, language would be an issue, despite all workers
being local, in terms of their distance from the plant.
Another challenge was finding workers with the right qualifications. Factory labour workers only needed
to have completed high school to qualify for positions. However, because of the area's relatively high
unemployment rate and the attraction of working for a major multinational corporation, some candidates
deliberately understated their higher qualifications to attain factory positions with Colgate-Palmolive. As a
result, some college graduates applied for jobs that only required high school as aqualification.
Poor infrastructure in Sri City was yet another issue. Because of the poor road conditions, employees from
Chennai could take almost two hours each way to get to work. They could also find that mobile phone
charges increased substantially after crossing the state border from Tamil Nadu into Andhra Pradesh to
work at the plant. Some companies chose to either pay a hardship allowance or provide residential facilities
for employees who travelled from Chennai to work at the plant.
Attracting workers from other toothbrush factories could also prove difficult. These employees normally
worked at small or medium-sized enterprises, which were largely family owned or family managed
companies that relied on community networks. These employees had strong, long-term relationships with
their employers, which often extended beyond the workplace. Getting people to leave such organizations
after many years of service would be a challenge.
Before determining the actual pay rate, he had to match the candidates with the appropriate positions and
qualify each position, which required various questions to be resolved: How important was each job to the
organization? How would importance be best determined? What was the market rate for these positions?
Transcribed Image Text:Instructions
Review the following case study very carefully. Based on the given scenario, questions are given in
google form. Please write the answers that correlate to the given questions in google form and submit
within the given time.
Scenario
COLGATE-PALMOLIVE
On March 2012, Aditya Singh, head of compensation for Colgate-Palmolive (India) Limited (Colgate-
Palmolive) was poring over five resumes placed in front of him. He had been asked to determine appropriate
pay scales for the five candidates
had ramifications far beyond the salaries of a few employees. The giant corporation, which was well
established in India, had opened various other plants in the past, but the new toothbrush factory in Sri City
had just started operations.
that the hiring process could be completed. Singh knew that the decision
COLGATE-PALMOLIVE SRI CITY PLANT
Colgate-Palmolive was the most trusted brand in India and a leading fast-moving consumer goods (FMCG)
company. Its wide-ranging sales and distribution network and strong manufacturing base supported the oral
care business across the country. It was the market leader in the oral care segment. With a market share of
57.8 per cent in toothpaste and 42.1 per cent in toothbrushes, Colgate-Palmolive was in a comfortable
financial position, with gross revenue for fiscal year 2012 of 28,055 million
Based on its 2020 business growth projections, the company had planned to set up a state-of-the-art
toothbrush manufacturing facility in India. The annual estimated capacity of the new plant was estimated
at approximately 150,000 tonnes of product, or 220 million toothbrushes. The project team had identified
a site in Sri City, in the southern state of Andhra Pradesh, on the border of neighbouring state Tamil Nadu.
This area was a manufacturing hub for most FMCG companies.
According to initial estimates, the factory planned to employ 500 workers, including both skilled technicians
and unskilled line operators (i.e., workers who were not required to have previous skills). At least 70 per cent
of these workers would be hired from the local area, consistent with the state government's mandate.
The production process for toothbrushes followed a six-stage process: (1) horizontal moulding, (2) vertical
moulding, (3) tufting, (4) end rounding and profiling, (5) packing, and (6) case filling and sealing.
Workers at the plant were divided into six functional groups: (1) projects, (2) operations, (3) technical and
engineering, (4) quality assurance, (5) human resources, (6) and commercial. In addition to these six
functional groups, an environmental and occupational health and safety group was also active at the plant.
CHALLENGES AHEAD
Singh pondered the challenges before him. For the new facility to be successful, it was critical to attract,
retain, and motivate the best talent. However, most FMCG companies set up their plants in nearby locations,
which created an extremely competitive labour market.
The manufacturing oftoothbrushes was highly labour intensive, unlike the production of toothpaste, which
was mainly automated. This facility was designed to be the first company-owned toothbrush factory in
India. The production process involved unique tasks (e.g., moulding, tufting, and end-rounding) that
required specific skills from workers, who nomally worked for smaller firms. To be appropriate for the
Definition Definition Amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item
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