How Do We Calculate Service Weightage for Our Upcoming Settlement? Seeking Guidance!

I am working in the tire industry with around 1,000 employees and a union. We have completed two settlements with nine categories, with a common variation of 1,250 and the next with a 1,000 variation for each category. Now, we are trying to determine the service weightage for the upcoming settlement, and we are confused about the calculation. Please explain how to calculate service weightage for 1 to 14 years of experience. Kindly explain and help resolve my issues.

Understanding Service Weightage

The service weightage does not have a legal procedure to be followed, but it is purely an arrangement between the employer and the employees. For example, if you fix a service weightage of Rs. 50 for a service beyond 10 years (covering those having more than 10 years and up to 14 years), a service weightage of Rs. 35 for a service of 5 years to 10 years, and Rs. 20 for those with a service of three years up to 5 years, those with the respective service will earn the amounts added to their basic salary.

It will be after adding these service weightages that the basic salary will be fitted into the pay scales. Therefore, the chances of an employee getting to the next level of the scale are also available. Fixation will, however, depend upon the settlement. I cannot comment further on it without studying the salary structure your organization is following right now. You can also refer to similar settlements done in Public Sector Units.

Hi Saiprasad, Calculating service weightage for settlement in the context of employment typically involves assigning a certain value or weight to each year of service to determine the overall compensation for an employee based on their tenure. The idea is to recognize and reward employees for their years of dedicated service to the company.

Here is a simplified example of how you might calculate service weightage:

Determine the Weightage Scale:
Define a scale that assigns a weight to each year of service. This could be a linear scale where each year is assigned a fixed weight, or you may choose to give higher weights for later years to emphasize long-term service.

Assign Weights to Each Year:
For example, you might decide on a linear scale where each year contributes a certain amount to the service weightage. Let's say you decide on a scale where the first year contributes 1 point, the second year contributes 2 points, and so on.

Calculate Total Service Weightage:
For each employee, calculate the total service weightage based on their years of experience. Add up the points or weights for each year of service.

Example:
An employee with 5 years of experience would have a total service weightage of 1 + 2 + 3 + 4 + 5 = 15 points.

Incorporate into Compensation:
Once you have the total service weightage for each employee, incorporate it into the settlement calculation. This might involve multiplying the total service weightage by a certain factor to determine the additional compensation for the employee.

Discuss and Negotiate:
Before finalizing the settlement, it's important to discuss and negotiate the service weightage with the union representatives and employees. Transparency and clear communication are key to ensuring that the process is fair and understood by all parties.

Hence, the exact calculation method and the scale of service weightage can vary based on the agreement between the company and the union. It's crucial to involve relevant stakeholders, such as HR professionals and union representatives, in the decision-making process and to adhere to any legal or contractual requirements in your jurisdiction.

Thanks