Amara Raja Group a leading business conglomerates with interests spanning varied verticals on Wednesday announced pay deferments to its employees at the junior and senior management level due to the impact of Covid-19 in the upcoming months.
Taking note of the extraordinary circumstances and the uncertainty in the business environment, Amara Raja Group Promoters holding the office of Managing Director in various businesses have voluntarily agreed for up to 50 per cent reduction in their total remuneration for the current fiscal, a press release from the group said.
The groups flagship company Amara Raja batteries Limited had 7,541 employees as on March 31, 2019 including employees hired on a temporary basis and the company spent Rs 345.23 crore towards salaries and other benefits, according to the company's annual report last year.
The group also said increments and revisions in compensation for the current financial year are being deferred for all categories of employees.
"Regarding the staff and management employees, it has been decided to restructure the existing CTC by bringing in a graded reduction of 10 per cent to 25 per cent.
This will be applicable for the junior and senior levels and the reduced amount will be reconstituted as 'Business Performance Linked Pay' (BPLP) in the compensation structure for the balance ten months of FY2020-21," it said.
If the business meets satisfactory levels of recovery and performance, the reduced amount will be rewarded back to the employees as BPLP, it added.
Due to the repeated lockdown extensions and extremely calibrated reopening of businesses, the fallout of migrant labour challenges, extra precautions and social distancing norms now emerging as the new normal, the Group expects demand contraction in specific customer segments, market volatility and resultant uncertainty in the months ahead, it said.
While the organisations in the Group are hopeful the economy will rebound sooner than later, the Management is constrained to take all possible measures in keeping the liabilities low, it added.
Jaikrishna B, President (Group HR) Amara Raja Group, said the BPLP scheme is a measure of creating a winning proposition for both People and Businesses.
The scheme aims at rewarding employees in the next financial year if the businesses recover and get back to the required levels of performance.