Salary Negotiation Dilemma: Should We Discuss Each Component or Just the Total Package?

Dear Colleagues,

Whenever we negotiate salary for a new position, should negotiation be done component-wise (Basic, HRA, Medical, etc.) or should it be done directly on gross or CTC? Kindly guide.

Thanks

Hi,

Generally, it's been done on CTC, but sometimes it's done on take-home salary or Gross also. Candidates do ask that they need this much amount as take-home salary, so we prepare salary accordingly. But CTC negotiation is the most in application these days.

Regards,

Amit Seth.

I am new to this site. I would like to know what the full form of CTC is as this is not the terminology used in the UAE.

Isak
Job Analyst
+971505458619

Hi,

CTC stands for "Cost to the Company." This is calculated taking into account all the expenses borne by the company towards an employee, like employer contributions to PF, gratuity, medical insurance, etc.

In India, the salary has mainly two parts: one is Gross Salary, i.e., payable to the employee directly and can be a fixed or variable component. Major components of this comprise Basic, HRA, Conveyance, Food Allowances, Performance Allowances, incentives linked to performance or company's performance. The other part consists of all expenses that the employer incurs for the welfare of the employee (mentioned above, like PF, gratuity, etc).

Example is mentioned below:

Basic: 120000

HRA: 96000

Conveyance: 9600

Employee contribution to PF: 12000

Medical Reimbursement: 15000

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Fixed Gross: 252600

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Performance Bonus: 18000

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Total Gross Salary: 270600

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Gratuity: 57600

Employer contribution to PF: 12000

LTA: 30000

Medical Insurance: 20000

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Cost to the Company (CTC): 390200

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NOTE: All the numbers used above are just approximations, just to explain the logic.

Thanks,

Neeti

Hi,

Please help me out regarding this crucial matter.

I need your suggestion on this matter. Please read it.

Imagine that someone is selected for the post of HR Officer. At that time, he received a call from the company's Head Office about the selection process and his salary structure. He was informed about a salary of 11000/- per month during the probation period. However, he did not receive any email from the company as he was at his native place where there are no facilities for internet or fax services. The Head Office HR Manager instructed him to collect the office order from our Plant, and he also sent details about the plant location.

When the candidate reached the plant, he found that the office order was for a trainee position with a salary of 6500/-. Consequently, he declined to join. The Plant HR Manager contacted the Head Office and clarified the situation, assuring the candidate that a new office order aligned with the initial discussions would be provided promptly. They emphasized the need for his early joining. Eventually, after further communication and insistence from the Head Office Manager, the candidate agreed to join without receiving any email confirmation.

After joining, he did not receive any emails from the Head Office. Despite his efforts to communicate with both the Head Office and the Plant Manager, responses have been delayed. Now, after completing three months of service in the company, he has only received positive verbal assurances. The concern is that despite holding an MBA in HR, he is receiving a salary of 6500/-, whereas a fresh BA graduate is earning 8500/-. This discrepancy is unfair.

Please provide suggestions on what course of action should be taken for him, as the seniors are not taking the situation seriously. Your feedback is appreciated.

Thank you,
TUSH