Saswatabanerjee
Partner - Risk Management
Anil.arora
Administration Head
Sovik Bhattachaerjee
Md- S.s Enterprise
CaPulkit
Practicing Chartered Accountant
Salmaanco
Head Of Operations At Machintel Systems (p)
Tajsateesh
Recruitment/talent Acquisition, Career Counselling
Autumn Jane
Workplace Happiness
+2 Others

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In my company, there are five departments. Only one department, which I belong making revenues. Using the revenue we generate the company pay salary for other departments. The company is treating our department like slaves, so that the revenue must not lost as this is the only revenue they are getting.
Is there any legal way to fight this.

I do not think that any company has been established to treat their employees or a particular department as slave. All 5 departments support each other in their distinct yet interlink activities to achieve the ultimate objective of the company. It is typical to have only 1 department generates revenue to fund the whole company. A simple 5 departments organisation structure may comprise of: HR, Finance, IT (these 3 functions can come under one roof and be known as Corporate Services), Sales & Marketing and Productions.

How a single department generates the required revenue to fund all the expenses and still make a profit has to do with proper business planning. While there are many elements to proper business planning, one key element is the pricing strategy of your company's products & services. And within this pricing strategy, one key component is "to know your costs" and "how much profit you want".

This means you have to know your product costs; how much to mark up the product; how many you need to sell to turn a profit. Remember that the cost of a product is not only about the cost of the item but also includes overhead costs. Overhead costs may include salary, rental, raw materials, marketing costs etc. In other words, all operating expenses necessary to operate the business so that if you sold it you would first break even and how many you need to sell it to make profit.

Do Google on the topic to understand and appreciate the dynamic of running a company. Hope the above is useful.

Autumn Jane

Hello Prakash,
Autumn Jane has given you the right inputs to make you THINK.
Which department do you belong to? And what are the other 4 departments? What is your designation/level within the company? Which sector does your company belong to--Education, healthcare, manufacturing, software development, etc, etc?
Unless you give more inputs, giving any suggestions would be very inaccurate.
Rgds,
TS

Its wrong to say that only your departmenr is making sales. If only your department was required to run the business, why would they have other departments. I assume that you belong to sales department. Sir its impossible to run a company only with sales department. You need production department to produce, accounts department to account, hr for employee management, etc.
And treating like slave!!!! well go for strike :) or handle it at your level.

Dear Prakash,
I agree wz the other senior members who have thrown light on your query pls be informed that all depts have their own forte and responsibilites thus no one is taken light by the management may be you are feeling that you are not noticed, please speak to your dept head .
rgds
sd

Dear Prakash,
I totally agree with Autumn Jane and others. Besides their views, I would only like to add that, the manner you have presented the picture, there is every chance to have a lack of faith and coordination in between the departments. This must be leading to bad interpersonal relations. You need to address the same with the help of HR people. There are provisions in Certified Standing Orders/Model Standing Orders applicable to your Company, wherein Dos & Don'ts on the part of Management as well as the employees are clearly spelt. You can take shelter of this Law and functioning Trade Unions also, who may take up the matter at appropriate level.
Best wishes.
AK Jain
HR Personnel
NCL, CIL.

Thanks all for their inputs.
Ours is a 25 members company. A few are not taking salary in favor of shares.
We have five departments: custom product dev (revenue making), product dev(yet to sell a piece), marketing(yet to sell a piece) and other two are support departments. No real HR.
I know the support departments cannot directly generate income. A custom made product is getting regular payment for development and maintenance and others are getting paid. With the main product yet to sell, and to keep company floating, the custom product members are treated like this. No holiday, no tour etc.
Thats why I am asking for legal ways.

Hello Prakash,
Since your's is a Product Development Company, I think you would also need to understand that the breakeven point for such companies is WAY HIGHER than for any Services company--which can generate revenue much earlier [IF not from Day-1].
In fact, this is where Venture Capital Fund Companies come into the scene--if you would checkout, most of the Product Companies [IRRESPECTIVE of which sector] invariably sign-up with one VC Company or the other.
I am not sure I understand your remark for the Marketing dept--'yet to sell a piece'. Without their involvement, how does YOUR dept sell & generate revenue? Maybe they aren't getting involved DIRECTLY [given that your dept is for Custom product devpmt, which usually needs specialized technical marketing skills]. But surely some sort of involvement would be there. If the answer is NO [meaning the Mktg dept is ABSOLUTELY NOT involved in handling your dept's sales], then what are they involved in? Obviously, NO company would have a marketing function without anything to do, even the Super Cash-rich ones.
Can you also elaborate a bit on the difference between your & the Product devpmt depts? Is your dept handling custom development for OTHER clients & the Product Development dept developing products under your company's brand name?
There's one remark you mentioned that seems a bit queer--'...no tour....'. Can you pl explain this? I don't get it as to how tours are associated with the issue you mentioned--UNLESS you mean that 'another way to make money' is not within your reach.
Now, let's look @ this situation from another angle--sort of 180 deg apart]. If you think things are SO VERY BAD in this company, then why don't you quit? Why languish there & spoil your career? Can you pl answer this query? No pun intended pl.
Rgds,
TS

If you want to bring about a legal recourse, it is not because your department is the only department generating revenue to fund the rest of the business operation. It should be "how" your department is being put through to generate the revenue. As you have briefing mentioned "no holiday, no tour, etc", that is any action that goes against the stipulated employment act can then be addressed legally.
Autumn Jane

Subject To Treating like slave.

Hi

I would like to share my experience, in this regards I faced the situation that you are facing right away. I wont say, " employer treat emloyees like slave", but yes, some organization or projects are there where challenges are many which force managers to treat employees with strict norm or rules. Especially in terms of revenue. Major Causes are for such actions by managers are:

1. Poor market for sales of product. Market keep on changing, from time to time.

2. High costing of Product/service with regards to current revenue generated. Or low net profit/Total Cost Ratio.

3. High cost of Capital associated with business.

4. Poor demand of Product /services in Market.

5. Force selling during early development of product.

6. Inexperience manager. Especially those managers who got early promotions.

7. Poorly educated managers: Most of the company/MNC's prefer to fill vacancy by IJP. In most of the cases, they have experience but not highly qualified, for eg: If a candidate completed MBA most of the HR in INDIA don't prefer to hire them, because they feel they don't have experience. This is a myth. MBA is designed in such a way by all repudiated universities , so that analytical skills developed. Experience no doubt have value, but HR's should seek for analytical skills. That's what is important.

Let me cite an example: In British Period, Business was done by " Cane & High Productivity theory", where it was believed , employees don't feel urge to work by their own, so they must be caned. An experienced managers, who have seen this will follow this theory blindly. Here comes the importance of education. Again " Team & Target theory based on psychological method " was developed in Japan, now days max MNC's are following this, in case a new market situation 99% of experienced managers not highly educated/ do research of latest trend, wont be able to develop new strategies required. They would follow their own methods which they have seen. This would add pressure on the entire team.

8. Last but not the least Poor fund for business & desperate directors/managers to make business successful at any cost.

It is to be noted manager's performance grid is based on A. Teams Performance. B. Net Revenue. C. Net Profit. So, managers with less strength of backbone would go with " Cane & High Productivity theory" for personal profits, if they are not aware of "Psychological Based Methods".

To Solve this Problem, employees should use following methods one after another, till problem solved:

1. Diplomacy & negotiation with Managers. Make managers understand why they are not supporting their decisions . Exact Problems/issues/challenges they are facing. If required speak & inform topmost managers about the problem if lower managers cant resolve the issue.

2. Ask managers to go with "SWOT" analysis of the Process path. So that loop & holes can be identified. And problem can be solved.

3. Consult with HR & have a discussion, it should be based on A. Problem/issues/challenges faced by employees. B. Clauses mentioned in Appointment letters, like no of working hours, Targets, etc. C. Labor Laws & compliances.

NOTE: If employers are not following Such laws, employees can take legal actions against employer. It is to be noted, based on issue, employers business license can be taken away , along with other punishment as per Trade & commerce laws, and criminal laws.

4 If nothing happen or no resolution occur, best is to quit from such job by following formal , legal & standard procedure. Please mention the reason for such separation. Jobs are always there in the market, & you can always get a better job. Its better to accept whatever has happened as an experience, so that in future such scenarios can be avoided

ELSE

Legal actions can also be taken against employers.

It is to be noted that 1st & primary Objective should be to negotiate diplomatically with the employers for resolution. Then other options should be used based on situation.

Regards

Sovik Bhattacharjee


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