Balancing Costs and Fairness: How Can We Create a Win-Win Conveyance Policy for Our Startup?

Conveyance Policy Assistance Needed

I need your instant help. Actually, my company is into sales and services. We do glass installations in buildings, hotels, offices, and malls.

In our company, employees who are installers need to move from one site to another and do not come to the office. Now the problem is related to conveyance. They get complete conveyance reimbursed from home to the site. As per my manager, we should deduct the amount per kilometer from home to the posted location and only pay for the mileage over and above that.

Employees who stay quite far from the posted location are protesting this policy, saying their salary is quite low and they live far from the posted location. In such a case, they need to pay the complete amount of conveyance from their pocket, which they cannot afford.

Please help me in making a conveyance policy that is in favor of both the company and the employees. It's a startup company, so we really need to control our costs, but at the same time, we need to ensure that our employees do not suffer. Please help me find a middle ground.

Regards,
Durga

Decision-Making in Conflict Situations

Good question. When in a conflict, it's easy to decide when:

1. When one party is right and the other party is wrong.
2. When both parties are wrong.

But when both parties are right, it becomes very difficult to decide who is right and what is right. The best method under such circumstances is to decide based on practicality and logic rather than what is right and what is wrong.

In the above case, what you can do best is to take the average annual conveyance charges submitted by the employees. Try to get the lowest and highest amounts submitted towards conveyance by the employees and then calculate the median figure. Use this as the basic benchmark amount towards conveyance. Any increase above this amount can be investigated by you to understand how and why there has been an increase.

Also, you can deduct a basic standard amount from the conveyance. This amount should be standard and represent the normal expenses that an employee would incur if commuting from home to the office or vice versa. This deduction should be treated as compulsory.

Hope this will help you.

Regards,
Octavious

No issues. The suggestion you gave, we tried it on some of our employees. In fact, we tried to make them understand that with this policy they can save conveyance amount when the site is nearby, and that saved money can easily be utilized when the site is far off. But most of them are just not ready to accept it. They are uneducated and easily forget what they saved but complain when expenses go above the approved limit.

Handling Unorganized Employees

How to handle such people? They are highly unorganized. Casual employees are highly uncontrollable. They stop working sometimes to build the pressure.

Dear Octavious, what you can do is hold the median of the average as the base figure, and no amount above that shall be cleared for conveyance. Additionally, you can provide them with a kind of travel pass that allows employees to travel throughout Delhi with just one pass. I believe public transport does offer such a facility.

In the coming future, remember that it is always better to engage such casual laborers through contract laborers.

Regards,
Octavious

I think you are wrong in trying to deduct the conveyance from home to the office and then pay the amount traveled over and above it only. The logic is this: it is the responsibility of the employee to report to the office and bear the expense of that travel, but it is the duty of the company to reimburse the travel to any customer site. Now you can start insisting that everyone report to the office in the morning, and they should do that, but that will only waste everyone's time.

Regards

We also engage in similar kinds of operations. The employees are not required to come to the office on a daily basis because their job will be at various sites. This site might change frequently; therefore, they are required to report at the site whenever such instructions are given.

We have a conveyance reimbursement system paid on a weekly basis on a "consolidated" basis, say, $320 or so. This amount (or any other amount) is arrived at by our past experience, i.e., the number of jobs one can handle in a day. This is for the employees who travel a certain kilometer radius on a day-to-day basis. If the same employee is required to go beyond this distance, we enhance conveyance only for those people. So, it depends on the distance one would travel.

We have been practicing this system for the last 40 years, and there is no problem at all with our employees. We have more than 4700 employees on our direct roll across the country, and the same system is replicated all over. The casual employees are also employees whether they work through a contractor or in your own roll; they work for your organization, right? Apply the same logic to them too.

See our travel policy attached herewith (original policy and the subsequent amendment in their eligibility). This is meant for our regular employees. We treat "Casual Labours" working with our contractors in the "others" category and apply the rates applicable to them as per this policy.

As someone commented, when their job is at the site, there is no point in asking them to come to the office first in the morning and ask them to disperse; it is a waste of time and energy and is unproductive.

What you can do is to understand the practicality of the situation and go for paying a "reasonable" amount wherein they do not incur a penny from their pocket; and in this pursuit, let them also think that this is not a "money-making" exercise.

Regards,
Balaji

Thank you, Balaji, Octavious, and Ranjit, for your great suggestions. I am saying that we deduct the km/amount from home to the posting location from the total travel, which means employees are going directly to the site without coming to the office. If they had come to the office, they would have paid from their own pocket. Based on this logic, we have implemented a policy where the company will only pay for mileage over and above if you are required to report directly to the site. If you move from one site to another for official work, it will be fully reimbursed by the company.

Some employees raised objections, so we set a lump sum amount for conveyance based on their past month's claims as a baseline. However, when the site changes and the new site is considerably further than the previous one, they request full reimbursement beyond the fixed limit. They do not consider that if the new site is closer to their home, they profit from the fixed conveyance.

Options to Consider for Conveyance Policy

To avoid frequent changes, we can consider the following options:

1. Find the median figure between the farthest and nearest distances and fix it, with no further changes.
2. Allow payment for mileage over the limit but retain flexibility for special cases with manager recommendation and HOD approval.
3. Pay the entire amount based on the fixed mode of travel determined for each level if the employee reports directly to the site.

What other options can we explore? Please let me know if you find any merit in the above points.

Regards,
Durga

Dear Durga,

Yes, the standard distance to and from the location is normally deducted if an employee claims total conveyance. However, if they claim only the additional kilometers, then they are paid accordingly without any deductions as mentioned above.

Regards,
sgmunje

In my company, we have set an 8 km radius. Anyone traveling to a site beyond 8 km from the actual office location is paid a certain amount. You could have a slab, depending on the usual distance of sites.

Regards

Dear Friend,

It is always true that employees want to enjoy the fruits from the tree and also consume the ones that have fallen on the ground. Similarly, owners not only desire the fruits on the tree but also gather all those on the ground. It is when both parties insist on taking more than their respective fair share that we experience industrial unrest. Hence, in your case, the employee wants to travel to and from home to work/office at the company's expense, and employers aim to minimize the conveyance cost by denying the employee the benefit of gratis home-to-work conveyance covered by the company expenses. What is the fair share of this cost that the employee should bear from their modest salary, and what should the affluent employer bear? Is that right?

As an HR professional with over 30 years of experience, I suggest that you do some homework, i.e., calculate the cost of bearing the conveyance expense versus the cost of a work stoppage, the damage to the company's reputation due to a dissatisfied employee, the risk of the employee trying to offset the loss of conveyance reimbursement in other ways difficult for you to monitor, the additional man-hours spent calculating daily distances traveled from home to office for each location, the impact on the employee's psychological well-being, and more.

I can assure you that the savings you anticipate will be significantly outweighed by the "costs" to the business overall. Think it over and then decide.

What should be done is not to revoke this benefit for all because a few may be exploiting it, but to identify and penalize those few wrongdoers as an example. If other employees object, ask them what they would prefer - a general crackdown on the benefit or their agreement to the punishment of the wrongdoers.

I hope you find my analysis of the matter helpful. The decision rests with you and your management.

Regards,
UG

We are a contractual company too, and we follow a policy that when we send a person directly to the site from home and do not require them to come to the office, we pay them full conveyance. On the day we require them to report to the office from home, we ask them not to charge for the distance traveled from their home to our office. Our employees are more than happy as they have to come to the office hardly one or two times.

Regards,
Maneesh Sanghi

We too have people out of the office at client sites for audit and consulting assignments. They don't come to the office most of the time. We have a policy of reimbursing travel costs from the deviation point, meaning the cost is provided from the point where he or she has to divert from his or her normal route. If the employee goes in a direction different from the way to the office, we pay the entire conveyance. If he has to travel a part of the way common to his office route, then that part is disallowed.

However, this is fair only if the person's posting location is fixed and doesn't change and if it was known when the person joined. When we changed the office 2 years back, we asked each one to give details of differential travel costs and increased salary to that extent. You have to naturally ensure that the person gets pay that is worthwhile for him to travel to the office at his own cost.

Thank you, everyone, for the wonderful and logical suggestions. I am looking for more options. Please keep posting if you find some more ways to address this issue. Once again, thank you very much for your active participation. All of you are amazing.

Durga, why don't you talk to your manager and convince him that if they can earn a few bucks, the policy should be proactive and positive to allow them to claim conveyance from home to the workspace and so on. In these days of high labor turnover, once you have raised this issue, you can talk to your unorganized labor and make it a point of motivation that you would be paying a conveyance allowance from home to the workspace. If the company happens to spend some amount here and there, it does not matter as a healthy HR policy creates a healthy workforce. Your employees will not try to manipulate and claim the actuals, which may be beneficial in the long run.

Think about this and act accordingly. I believe we need to come out of the conservative shell and think a bit differently to maintain the workforce.

There are three options for you:

1. Deduct the amount or kilometers of the distance from home to the office and reimburse the remaining amount/kilometers. You can bifurcate them as per the designation if they vary.

2. You can tell your boss that if we go long, then we should always aim for a win-win situation. If we earn Rs. 100/- with the help of these people, then we should spend Re. 1/- for them. Yes, there might be a few people who take undue advantage of this, but we will get more good people whom we can trust.

3. If your boss declines the second option, then FIRE HIM.

Hello all, I am working in a Japanese company that has a warehouse in Greater Noida. We have around 20 contractual staff working in the warehouse for loading/unloading activities. All of them are unskilled workers. Since the staff come from different locations, we want to provide them with conveyance reimbursement as having a company cab will not be feasible due to mismatched routes. Based on their actual expenses, the cost is approximately 5000/- per person, which the management will not approve under any circumstances. Can someone guide me on how to create a conveyance policy for contractual labor? This is very urgent. The salary bracket for all the contractual staff is between 12000-20000 K.

Regards, Yamini