Labour Law & Hr Consultant
am asking for tirupur, tamilnadu Zone C
6th September 2017 From India, Tiruppur
CTC has nothing to do with type of organization or no. of employees. It is one of the management tool to understand the cost to company per employee per year for proper costing of manpower and control if required. Even it has no legal status.
Thanks & Regards,
S K Bandyopadhyay (West Bengal)
USD HR Solutions
6th September 2017 From India, New Delhi
Most companies in Namibia, has introduced the Cost to Company (CTC) method which i as a trade unionist believe was unilateral introduced, there was no proper consultation with a recognized trade union in that respective industry.
Now my question is why is most companies opting for this method? i believe somewhere, somehow companies are benefiting from these scheme? Please colleagues help me to understand these scheme and on which route i should use when negotiating increments and benefits, cause this method works totally different from the normal scheme that we all know.
Just for your information i operate in financial industries.
Namibia Bank Workers Union
7th September 2017 From Namibia, Windhoek
Why such a hype about CTC as if it is going to create some tangible and intangible advantage to both labor and management in the matter of compensation management?
CTC is nothing more than an accounting expression of the total annual cost incurred by the company per employee inclusive of wages/salary plus fringe benefits.It is particularly used by some Asian Transnational Corporations to lure the employees about their compensation package.
In short CTC = Direct benefits + Indirect benefits + Savings. Direct benefits include basic, dearness allowance,HRA, medical allowance, LTA,CCA, conveyance allowance, incentives, bonus etc. Indirect benefits are interest free loans, food coupons or subsidised meals,medical insurance premium paid by the employer, company-paid accommodation and the like whereas "Savings" denote statutory contributions paid by the employer to EPFand Gratuity Fund and other superannuation benefits payable under the contract of employment.
Therefore, it is to be distinguished from 'Gross Salary' which simply denotes the actual total salary before deductions. The above mentioned Indirect Benefits are not payable in cash to the employee.Similarly, the accumulations of EPF and Gratuity are payable only on the termination of employment and that too gratuity being an out and out employer's statutory liability and its payment is subject to certain conditions and ceiling only.
If you critically analyse the concept of CTC, you can easily understand that it is not a new concept in the matter of salary and wage administration but only the age old practice reflected with catchy nomenclature. In the recruitment advertisements and offer letters, the expression of compensation package in terms of CTC simply makes the offer more attractive for CTC is variable in due course with service.
8th September 2017 From India, Salem
After a detail excellent submission by Mr. Umakanthan, I would like to add the following.
First of all any Union negotiation has its own style but the common thing in any negotiation- objective from Union point of view to get better facility for the employees and from management point of view it is how much additional cost impact to organization. At the end of the day any additional cost must be absorbed by the business , otherwise existence of the business will be a real problem.
Keeping the above thing in mind and what Mr. Umakanthan has been explained that concept of CTC is not a new concept and most of the management now a days thinking to tell this to Union while negotiation for better understanding of the total cost.
At the end of the day both Union and Management as partner to the business should understand the detail of the total cost for betterment of the Organization. As an example if the union demands for x amount of salary increase along with free transport to bring employees from home to office and back and management agree to that, there is a total cost for direct as well as indirect which will increase to the business. Union will negotiate in its own style but both union and management should understand the total impact at the end of the negotiation.
Thanks & Regds.,
S K Bandyopadhyay
USD HR Solutions
+91 98310 91531
8th September 2017 From India, New Delhi