India/ Bengaluru

The effective harmonization of payroll policies

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Modern enterprises face an ongoing challenge in streamlining and optimizing operations across disparate geographies, systems and markets. An ever-changing business landscape, a constant churn in regulatory and compliance requirements and a technological landscape rife with constant disruptions and innovations, make for a very volatile operating environment.

Historically, policies towards geographical pay differentiation developed in ways that were appropriate to the nature of business, the size of the unit and the frequency of the units in a particular location. As a consequence, every sector developed pay policies based on multiple factors and variables; the majority of which were highly localized, non-standardized, and non-scalable. As enterprises continued to grow, and their operational complexity continued to multiply, the imperative and immediacy of managing short-term operational goals drove organizational strategy into silo-based paradigms, where the short-term mattered more than the all-important, but imperceptible, distant and long-term goals.

This gave rise to unacknowledged and unforeseen organizational fault-lines and fissures – deep- rooted and systemic imperfections that most business leaders only notice, when issues become unsolvable, and come to a head. New innovations, changes, or drastic shifts in style of functioning propel this latent distrust and unease on to the surface, when employees defy organizational mandates and larger goals, overwhelmed by distrust of the management, and misgivings about the enterprise’s attitude towards its workforce, and plans for them.

A large information technology corporation with multiple verticals, business units and operations across regions and geographies, was struggling to amicably resolve long-standing labour disputes with its workforce. It had multiple policies and processes that were independently created and maintained. The corporate group had difficulty in harmonizing the policies due to locational and geographic challenges.

The corporation’s verticals and business units also struggled to convince stakeholders spread across locations, to align to, and incorporate, uniform policies that would introduce an element of standardization and homogeneity into their functioning. The customer had to overcome a tremendous amount of organizational inertia, a resistance to accept the implementation, because employees were largely unaware of the long-range, financial and non-financial impacts of the strategic change. The management’s vision and strategy could not be successfully translated and articulated into a shared aspiration that employees could instantly connect, and identify with. A central rift, long present between employees and management, deepened with the proposed broad- based changes, which were to be implemented without extensive consultation and buy-ins from employees.

As the management’s strategy began to bear form and shape, long-festering employee grievance finally culminated into a lingering, but explosive stalemate and impasse. Faced with a near- unavoidable strike, the corporation swung into action, and marshalled AscentHR’s legal expertise and brokering ability. They activated, what is, in industrial relations parlance, a BATNA, the best alternative to a negotiated agreement when employees initiated a strike and conciliation proceeding against the company’s board of directors, and top management. They also alleged unfair labour practises after a few employees were terminated by the corporation, on charges of unproven misconduct. Although technology workers cannot formally unionize, per extant labour laws, the corporation’s employees nevertheless rallied behind a large and informal union, constituted because no alternative dispute resolution and grievance redressal mechanisms had been initiated by the corporation.

The corporation’s attempt to introduce newly homogenized and uniform payroll policies, served as a lightening rod to the labour impasse. AscentHR undertook a root cause analysis with a focused investigation into labour compliance and labour relations. We adopted a two-pronged approach of simultaneously educating both the employer and the employee, about the benefits of policy rationalization and homogenization. We undertook extensive outreach programmes – educating employees about the impact of the new policies on their take-home salaries, across bands, roles, grades and designations. We undertook a “what if” analysis which enabled us to provide knowledge about compensation and analysis and its impact on the organization; resulting in uniform policies across the organization. Second, employee distrust was mitigated, by providing them with comprehensive explanations and clarifications about the new salary structure and break up.

AscentHR’s competencies are built around labour negotiation, payroll automation, legal and tax advisory as well as consultancy services. Our proven competencies in diverse and disparate areas can be leveraged to provide customers with solutions that are highly customized; tailored to address their unique needs, but global enough to piece together, complex, disparate and intangible moving parts, into a highly functional, seamless, frictionless and effective whole.

For our customer, we commandeered our extensive experience in labour negotiation and dispute resolution to broker a lasting, amicable solution that was optimized for the employer and the employee alike. We effectively represented the corporation in our interaction with the labour department. We drafted, and set up a grievance redressal mechanism at the client’s location to pre- empt the possibility of discontented employees from being further influenced by external vested interests. A parallel strategy had, as its fulcrum, the setting up of independent dispute resolution bodies, which were employee managed and run, with minimal management intervention.

The client, faced with imminent and impending investigations into allegations of unfair labour practises, a loss of reputation, and incalculable production losses, had to marshall every arrow in their quiver to conclusively and irreversibly solve long-brewing and long-ignored labour issues.

A dispute about the rationalization of pay policies snowballed into a near catastrophic stand-off between the corporation and its workers, potentially costing incalculable losses in legal fees, a disruption of business, and services, and a near irreversible loss of reputation and market credibility for the corporation. The corporation’s management could now focus on what it did best, engineer growth, revenues, new acquisitions, and increased business, instead of fruitlessly engaging in dispute management and redressal.

AscentHR’s unique value proposition is our willingness and ability to synergize our vast experience and extensive knowledge of payroll processing, automation, compliance, legal expertise; combined with multiple industries and organizational structures, into crafting a solution that is tailored to your unique, distinctive needs. We help you do what you do best – grow your business, and excel at it.