No salary cut during lockdown, carmakers hand out pay hikes and promotions to workers

Having assured employees of no salary cuts or job cuts, carmakers in India are gradually concluding their increment and promotion cycle as the market recovers faster than expected.

Toyota Kirloskar has announced pay hikes for non-unionised workers, while Hyundai Motor India has raised the wages of factory workers and is in the process of deciding on increments to office executives. Market leader Maruti Suzuki NSE -0.88 % is likely to release bonus and incentives in the coming two months, ..

With the outbreak of Covid-19 and the lockdown coinciding with the pay-revision cycle, and since the past year was one of the worst for the automotive industry, there was major anxiety within the workforce about possible job and salary cuts. While the vehicle makers have protected their workforce from the financial shock of Covid-19, many component supplies and dealers have cut both salaries and jobs, with their cash flows drying up during the lockdown.

Almost two months since the resumption of operations, 10 of the 14 carmakers have released bonuses and incentives for last year and half a dozen of them have given promotions or are in the process of doing so. Honda, Toyota and Renault have given pay hikes of 4-14%, depending on the base salary and position.

Hyundai Motor India senior vice president — people strategy and business support — Stephen Sudhakar said the company had announced promotions to blue-collar workers on the shop floor as per their eligibility. It had released their performance bonuses in March itself.

“We are in the process of firming up our plans for the junior, middle and senior-level executive cadres,” added Sudhakar.

Maruti, Ford, Skoda Volkswagen and MG Motor had deferred decision on increments, but are now likely to take a call shortly.

MG Motor India managing director Rajeev Chaba said: “With things getting back to normalcy, we are currently planning to give increments and promotions in the next 2-3 months, which is sooner than what we had anticipated a few months ago.”

But some of the companies have decided against giving salary hikes.

Rajeshwar Tripathi, the chief HR officer at Mahindra NSE -0.63 % & Mahindra, told ET that the company had decided that there would be no salary cuts at any level and that it was also going ahead with payment of performance pay and promotions as usual.

“There will be, however, no salary increases given this year. The thought process is, we need to be sensitive to the difficulties which employees could otherwise face even as we manage a difficult year,” added Tripathi.

Vikram Gulati, the country head and a senior vice president at Toyota Kirloskar Motor, said the company had paid its employees right through the lockdown phase, and decided to go ahead with the salary increment with effect from July 2020 for non-unionised workers and performance bonus for employees.

Despite sales in the Indian passenger vehicle market in fiscal 2020 falling to the 2015 levels and Covid-19 adding to its challenges, experts feel the need for personal mobility would help drive a market recovery. Within two months of the market reopening after the lockdown, a majority of the carmakers have touched 85% of pre-Covid levels on retail sales and booking. If the economic fundamentals support, the bounce back will become quicker and the companies want to ensure that they retain their ..

 

Source : economictimes