Seeking Advice: How Can We Motivate Employees with Allowances in Remote Greenfield Projects?

Dear Friends,

A Navratna Government of India Enterprise is proposing to establish a steel plant of 3.0 mtpa. This is a Greenfield Project in a remote/far-flung area, approximately 20 km away from a District Headquarters (a remote area) in Chhattisgarh State with only 10% House Rent Allowance (HRA) as per the Government of India's guidelines. However, employees are almost spending an additional 10-15% to reside in suitable rented houses due to the non-availability of adequate rented houses in the District Headquarters and the lack of quarters constructed by the employer at the site.

Types of Allowances/Incentives

In the above situation, what types of allowances/incentives may be appropriate to motivate the employees? I earnestly request the members to share their valuable suggestions with supporting copies if available from any other Greenfield Projects for reference.

Regards,
kadalirao

Dear kadali ra, you might find this disappointing, but since the project site is only "about 20 kms away from a District Headquarter," there is hardly any 'hardship' involved to qualify for getting 'hardship/project allowance'. The HRA allowed can be as applicable at that District Headquarter. Special allowances are applicable to Greenfield projects in barren, inhospitable land in far-flung areas like in the wilderness or high altitude areas (in the case of hydel projects). At best, you can provide your employees with company transportation from several pick-up points from the District Headquarter to the Project site.

Warm regards.

Dear RK Hansdah,

Thank you very much for the information. It's not a question of disappointment, but rather how to motivate employees to voluntarily contribute their best efforts in an upcoming project like this, where everything needs to be established, unlike working on an already established project.

Conditions for Providing Company Transport

Are there any specific conditions to provide compulsory company transport to employees, such as a minimum distance, or any other facilities to be provided on-site?

Best regards,
kadalirao

Dear friend Kadali Rao,

There are no "specific conditions to provide compulsory company transport to employees, such as a minimum distance, or any other facilities to be provided at the site." It only depends on how benevolent and good the management is. However, since it is a "Navratna Govt of India Enterprise," it should definitely do so to set an exemplary standard of concern and care for its people.

Please suggest this to your MD (CEO at the site) or Director (Personnel), with the fact that in lieu of any 'hardship allowance,' this facility can be given to employees. This ensures the following:

1. Savings on account of 'hardship allowance'
2. Ensuring more safety for employees while going to the site (thus also saving on compensation payable in case of accidents while going to and coming from the workplace)
3. Ensuring punctuality in reporting duty
4. Ensuring more employee satisfaction and enhancing motivation

I hope this shall be approved at the earliest. Do not forget to let us know!

Warm regards.

Dear Mr. Hansdah,
Taking the safety of employees into consideration, free transportation is provided to ensure punctuality and thus to avoid the loss of man-hours. We are also in the process of providing a canteen facility (not on a subsidy basis) to all employees (currently 230 in number). This decision is corporate, so it takes some time. However, a canteen allowance is being paid to each worker at the rate of Rs. 40 per day for physical attendance. For officers, all allowances under the "Cafeteria Approach" amount to 47% of Basic Pay, including a 10% Conveyance Allowance, whether they own a vehicle or not. These allowances are available to established projects as well.

We are now considering what extra allowances should be provided to employees in an upcoming project where they will need to contribute more. I request some input from the team members to help in convincing and justifying these additional allowances.

Best regards,
Kadalirao

Dear friend Kadali Rao,
There are no specific conditions mandating the provision of compulsory company transport to employees based on a minimum distance or other criteria at the site. It ultimately depends on the benevolence and goodwill of the management. However, as a "Navratna Govt of India Enterprise," it is expected to set an exemplary standard of concern and care for its people by providing such facilities.

I suggest proposing this idea to your MD (CEO at the site) or Director (Personnel), highlighting that in place of any hardship allowance, this transport facility can offer several benefits such as savings on hardship allowance, improved safety for employees commuting to the site (leading to potential savings on compensation in case of accidents), enhanced punctuality in reporting for duty, increased employee satisfaction, and motivation.

I hope this proposal will be approved promptly. Please keep us informed!

Warm regards.

Dear Kadalirao,

Thanks for the information in your reply. As I understand, you want to propose some more allowances, although the existing allowances appear to be satisfactory. While one would always support the employees on the question of better pay packages, it is also a fact that the employees of Navratna companies are now receiving respectable salaries, and increasing it further could be counterproductive to the nation as well as the industry.

If you look around, you will find that many PSUs, including the Navratnas, are in an expansion phase—whether it is NTPC, SAIL, Coal India, ONGC, or Indian Oil. Many of these expansions not only involve capacity increases but also greenfield projects. You may find out if they are paying out any additional enhancements in allowances.

Since it would not be advisable to give project allowances, you may also examine and propose whether an incentive for timely completion of the project stages/milestones can be given. Such an incentive would not only be welcomed by the employees but will also help the management in timely completion of projects and avoid costly project overruns and delays.

Warm regards.