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 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.
And treating like slave!!!! well go for strike :) or handle it at your level.
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 .
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.
AnonymousThanks all for their inputs.
9th August 2013 From India, Chennai
9th August 2013 From India, Chennai
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.
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.
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
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.
I am reading your post with interest and an attempt to suppress laughter.
Do you think that you can take legal action against your employer and survive in the company ? or even get a decent company after that with the reference and certificates you will get on being terminated ?
You will take legal action for what ?
For being made to generate revenue ?
For not being taken on tours ?
For being made to work hard
Only one that you have a grievance is no leave
(I assume you are talking of not getting weekly off. If you are talking of not getting approval for leave, then it joins with the list above)
There are some employees who are not taking salary as they are getting shares in a start-up. That is not against the law, its their individual choice. So are you complaining they are getting shares or that the are not given salary ?
You are in Information Technology. If you dont like your company, you can always leave and join another one. What stops you ? You are not a bonded labour. You can resign and leave at any time (if you are getting another job, that is).
Incidentally, i would like to understand, is the other "unproductive teams" getting taken to tours ?
I have gone through all the responses by the member and the query/ questions by you Mr Prakash but one thing which im not able to understand is your classification/ definition of treating like SLAVES by Employer/Company given by him.
I have few questions for you and I believe which will help the community to understand the motive of your query, your own understanding with your query/questions..
Please help our community with your answers of following:
- share your qualifications and experience with this company
-Your role/ responsibilities with your “Customer Product Development” department
- do you feel like you are playing an important role or generating Revenue anyhow for your department/company
- and what is revenue in your understanding actually, (think , do make a research, consult with friends and other first)
If you think that only your department is generating revenue than you are at highly mistaken or need to improve your knowledge in this regard. As our respective members has already described that not a single department can only be the reason or able to generate revenue for your company, because they all are interconnected and incorporated to support each other to reach Organization goal (Revenue/ROI etc) else have no reason to be existing, therefore, I request you to correct or improve your knowledge with revenue generation and role/services provided by other department which is really important for you.
And as you already have shown your understanding by defining your situation at work place by referring “Treating like SALVE” , I want to know if there is anything like misbehave, abusing or hitting by your boss(s)/seniors and other at work place, anyone who stops you to have food/lunch/coffee/tea, stay and work late at night, ask you not to speak with other etc , and if not then what you actually feel slavery is? And what do you mean by harassment?
Your query/questions evidently show how much you are frustrated with your own expectations which were not fulfilled actually and the atmosphere and work pressure which you are not able to handle, immaturity or the way you are treating by other bothering not making you feel good there.
I second to our experts, senior and other respective members, if you are thinking about taking legal action mean you are doing something which has no base or reason to do so, you are actually wasting your time and energy which can be used for searching another job, like TS and other has also advised you above.
12th August 2013 From India, Chennai
12th August 2013 From India, Chennai
Autumn Jane, correctly understood me.
The custom product, which generating revenue, is for a single client who is paying regularly for the services. The other "products" are our company are for vertical market, yet to sell.
If a member in "other products" ask for a holiday, granted immediately. If a member of my team asks so, then is NOT granted. "THEY" enjoy all the benefits of the company, but we are preferred next of "them". Our manager always criticize us, but praise the others. So we cannot go to our own manager. He is the one who is treating us like slaves. Others managers/director would no go against my manager, as they guilt that their work is yet to get generate a penny.
Why not leave the company??? This is not discussed on this thread. I want to know what legal employment act India provides.
From my understanding, I feel that your problem is related to "Perception". Or in simple way "Point of View of an action". Sometimes it happens in our professional life that we try to judge, view , understand ,react to a "topic / subject /series of action" in our own unique way based on certain information we have about the "subject/topic/ series of action". For an example: You are considering that your managers are treating you/ your department like a slave (that's your perception/point of view) where as your managers may think whatever they are doing that's the best way to manage or continue business(Perception of your managers or their point of view).
See, from my understanding, neither you nor your managers are wrong. You are unable to accept the way of managing business by you manager/s because you are facing challenges to your social life, especially when you need to spend maximum time in office as you are not getting leaves easily & you are considering this act as an immoral act of your managers based on your understanding of business , amount of data related to business to which you have access. My friend you are not wrong from your end, at the same time your managers are not wrong too.
It a Human Psychology that all humans prefer to get maximum benefit for any action(in this case your service), so for your work / job if you expect that you should get maximum compensation/ rewards & recognition/ Perks / leave / right shift timings / sweet behavior & sympathy from your managers, you are not wrong anywhere. Every employee look for these.
Now, think from the point of view of your manager. Your department, I believe ,is earning maximum revenue for the company & major source of income for the company, & there by its existence, as your department is connected with the single "custom based product"(one client). So, primary objective of manager of your department would be:
1. To satisfy the needs of clients for next order & to get reference of other client from this existing client.
2. To keep flow of fund steady, so that very existence of the company can be maintained.
3. TO ENHANCE BUSINESS GROWTH.
Under such scenario, pressure/stress on your department would be more then other departments as they are not connected to the existence of the company or their objectives/ target might not be as important as objectives/targets of your department for the best of company. So, challenges associated with managing efficiently your department to a manager is much more as compared to managing other department. So, if a manager provides leave to an employee of other department, not to your department then his objective is to run smoothly the business, so that primary business targets can be achieved & continuation of existence of business. He don't have any personal grudge with any employee of your department. It just he cannot afford less manpower to you department as it is earning maximum revenue. It is as simple as that.
Now, Prakash you need to understand that, neither you nor your managers are wrong. We want many things in our life, but do we get all of them as per our wish, no we don't. We have to adjust & negotiate. Where ever you go you will face challenges, be it any job & anywhere in the world. You cant run away from your challenges.
So, if your manager is not giving you leave, ask your manager for leave a month ago, plan your leaves & discuss with him so that your manager can also do manpower planning based on requirement. I am sure he wont refuse leave & if he refuse as him the reason & negotiate for leave. Yes sometimes it happens that "emergency leaves " need to be taken, under such scenario, discuss with your manager, why you need that leave, how important it is for you, make him understand. Now, he can or cannot offer you leave, based on manpower required. If he cant then try to understand that he is not doing this purposefully, but he don't have any other choice.
Prakash, from my experience, let me share something with you since you are asking/seeking legal support, "whatever is morally correct is not always legally correct". From my rich experience of 6years in Operation, Team managing, & there after dealing with some of the best HR Leaders/Managers of fortune 500 companies, I am saying, I have faced many such situation in my life. Even as an HR, if any challenge come in front of me to judge an action in terms of Moral/ethics & law, I have to go by law. So, First judge whether you are " Morally Correct " or " Legally Correct", then decide.
PFA of Indian Labour Laws.(This will help you Prakash".
When a company hire you or any employee, they provide you with your KRA's, there is no slavery here. You as an employee is suppose to do your part in a professional manner and you should end up doing a very good work, at least that is what the company has hired you for. You didnt mention what slavery methods they are using, but if they are asking and/ or requesting your department to give a better performance, then that is for the good of all employees and not only your department. I head the operations at my organization, if any one does not perform, why should I waste my time and her/ his? I hire people to perform and not to pay them for having fun, if that is called slavery, then sorry dear, you need to revue your accounts on that regard.
I dont mean to offend you or any person by any way, but if you were the owner of that company and you had to pay a huge amount of salaries, taxes and other bills, then trust me you will not accept any thing but a Hard Good Work.
Even I am going through his blogging. I agree with you but does not support all what you have said. From my experience I have seen often operational head's for their career growth/profit don't follow labor laws:
Eg: Stretching of Shift hours. Sometimes for Net Profit they ask for stretching, shift time extend to 14-15 wrk- hrs.
Now, as per labour law:
Maximum work hours= 9hours per day.
maximum OT can be paid=150 hours per year.
If shift timing is of 14-15 hours/per day ,OT cant be paid as per laws! Employee are threatened to work....Under such scenario, employer or Operational Head, should be thrown behind bar of Jail or Public should be informed so that such useless Operational Head can be punished severely.
Again from my experience, I have seen, often Mr A(agree for stretching) & Mr B don't (no stretching for any reason), during RnR/Appraisal/ Promotion Mr A gets more benefit then Mr B (due to moral ground/ loyalty). No one work for charity. Is it not injustice with Mr B? As per law, if stack grid/performance matrix of Mr A & Mr B are same for 9 work hours, they should get equal benefits.
Again, under such situation if if Mr B get more or same benefits as Mr A, other employee including Mr A will say " Politics". Mr A's performance will hamper too(Productivity).
Salmaan, you tell me under such situation what should be role of " HR "? I can give you 10 names of branded MNC's where such situation has occur. If this can occur in MNC , I am sure this can occur in small companies.
Trust me employees are threatened by Managers so that they don't open their mouth, I have seen this by my own eyes...
Salmaan, Truth is " Prakash" needs to decide, what exactly has occurred wrong with him/his department? He needs to judge whether they are " Morally wrong" or " Legally wrong". If legally wrong then he needs to judge, whether to fight or to quit.
Those days are over when Managers/Directors use muscle power/ monetary Power/ Political Power to suppress the employees. Media has became too powerful & social networking sites are developed to open the Mask of Directors / Managers /Operational Heads, who can do anything wrong with employees for their profit/organizational profit.
We all have to follow laws of the land. If there is a challenge between " Morale" & " Laws", laws are to be followed. Its better to close those business which cant follow labor laws & hamper social / work life of employees.
First of all, thank you so very much for bringing the topic of having the employees extend extra hours with out paying them, this as a matter of fact to me is absolutely not acceptable for sure. In my company, OT has been offered/ informed to all employees in a week a head, if she/ he likes to extend and/ or come on a weekend day, then they have to register in the OT book which we keep. They not only get paid per hour with us, they even get an extra incentive for that day as well. My point was very clear, for an employee in my company, she/ he is to work for 9 hours at the max including the breaks. I expect all employees to work their utmost to achieve the target (Realistic Targets) with in the 8 hours of work... I do not accept any employee to waste time and get her/ his time pass here or there. Yes, as responsible people, we also have targets to achieve, right? therefore, being very transparent with my employees has given both me and the employees the understand we were looking for. Throughout my 24 years of work life, I have seen people who would like to work as per their own terms and condition, that for sure doesnt work for me, I will not stich a company as per every one's need, no.. I have a policy book that every one has to read, sign & respect. I have asked some employees to leave because they are simply doesnt want to improve. I have given them enough chances and written correspondence for over 2 weeks to improve, but they didn;t, I never hesitated in terminating them when the dead end arrived. See, we Heads of Operations/ Directors etc... have been given a responsibility no only to grow the company but also to teach and present the right people to lead the future. I believe that carelessness & leniency to compromise a certain target will bear no fruit for any organization. In that way i will be cheating not only my self, but the person am serving, the employees who are working very hard in order to give a chance to someone who doesnt really wants to work to grow a negative picture infront of every one.
Mr Sovik, Just want to clear something here and that is, in my words I never meant Mr Prakash by any chance, I was only bringing a point to clarity. Before I hired any one in my organization, I ask that person: Are you fully aware now of what your KRA's are? Just before she/ he is granted the job. Her/ His agreement means I mean business and not time pass.
Mr. Sovik, It was indeed a pleasure and I thank you for your words.
Best and warm regards
Thank You for your response. Even I agree with you. Indeed the policies, practices & strategies you have mentioned I follow the same. See, I don't expect from an employee without huge market knowledge, business experience or fundamental knowledge of business (MBA/ CA /PGDM) to understand,
1. why I ask him to be very straight- forward, speak openly, correctly, using minimum words & most important after speaking once, he need to take responsibilities of what he had said.
2. Speak less & work more to meet the target's.
Neither its possible for me to make him/her understand/ teach that employee my thoughts or what I want from him / her in one day. Patience & experience plays an important role. Sometime, for grievance handling, we have to think at their level, maturity, so as to do Justice with them & for me to reduce attrition, achieve my quarterly targets, etc. This should be correct approach. But yes, we have to be strict at times.
Mr. Salmaan, I really appreciate & respect , your valuable suggestion w.r.t this question. And these days business challenges are so much, that sometimes we have to be strict for continuance of business. But again decision should be on the basis of situation & issue.
Yesterday only I was dealing with a UK client, he was asking me to do a deal on behalf of him, only once I thought that this client might be a "Potential FRAUD", after surveying the market. He was playing with me & I was playing with him, mean while I was waiting for his verification in UK. He was in a hurry, so I had to speak with one of the supplier(Vendor) in the market & to move forward with the deal. Costing of the Product per unit was $1800 USD. In the mean while when I got Verification report from UK, I was shocked as client's verification report came incomplete & right away I had to cancel the deal. Informed the supplier not to move with that client(as this client might be a potential Fraud).
Now, this maturity & power of forecast of business risk, I have developed after gaining experience. I cant expect a fresher or low experienced employee will have same competency level & maturity level. If they commit a mistake, then I have to accept it as a business loss. I cant punish him for he don't have that competency. So, sometimes we have to think at their level.
But yes, Mr Salmaan , I really appreciate your point of view in general. Even I learned a lot from you Sir. Thank You very much for sharing your experience.
(MBA-Finance & HR, B.Sc Mathematics Hons-University Of Calcutta)