What are the principles to be followed while harmonsing the compensation elements of the 2 organisations? Some specific doubts are:
1. What if the acquired company was giving out housing and vehicle loans to its employees?
2. What can be done if the acquired company provided a transportation allowance (as a percentage of base salary) while the acquiring company provides a pick-up and drop facility instead
17th September 2011 From India
Here's what we had done . However, I look forward to the replies and contribution to this post. Its best we hear more practices , before you draw your learning points.
- What happens if the acquired company was giving out housing and vehicle loans to its employees while the acquired company has no such provision? - The one that provides such benefits would continue till the next financial year. The salary bands would ensure similar levels are streamlined, from both the companies. New compensation structure would find a middle ground, for those benefits. The loan amount would be closed as deemed. No new loans would be issued.
- What can be done if the acquired company provided a transportation allowance (as a percentage of base salary) while the acquiring company provides a pick-up and drop facility instead : Transportation , no matter how much is it considered , rather degraded as a hygine factor, remains a huge retention and satisfaction tool. This is what we did. We offerd transporation to a level including freshers to second level supervisors such as Project lead. Assitant managers and above were offered Car benefit.
- (I presume in this case that if the allowance was removed in lieu of a bus facility, the workers with a higher salary would protest. What can be done in this case) - Here's what I would suggest, initially offer both the benefits, either bus facility or transport allowance. Eventually streamlining it to one process.
Looking forward to more replies.
17th September 2011 From India, Mumbai
Are there any legal risks involved in making such changes like
- withdrawing feature of leave encashment
- replacing transportation allowance by bus facility
- stopping loans for existing employees
during a post-acquisition harmonisation process?
18th September 2011 From India