MC - Salary Analysis Project - Transformer Sales

MANAGERIAL COMPENSATION
SALARY ANALYSIS- TRANSFORMER SALES
BY:
Anshu Sethia
Anurag Anand
Ayushi Anand
M. Kavita
Rohit Mittal
Shweta Shukla
Sugam Malhotra
Vineet Gijre
1|Page
Table of Contents
ENTRY LEVEL ................................................................................................................................................. 3
LARSEN & TOUBRO ................................................................................................................................... 3
SALARY COMPONENTS.......................................................................................................................... 3
INCENTIVES AND ALLOWANCES............................................................................................................ 3
SIEMENS .................................................................................................................................................... 4
SALARY, ALLOWANCES AND INCENTIVES COMPONENTS ..................................................................... 4
SCHNEIDER ELECTRIC INFRASTRUCTURE LIMITED .................................................................................... 5
SALARY, ALLOWANCES AND INCENTIVES COMPONENTS ..................................................................... 5
COMPARATIVE ANALYSIS .......................................................................................................................... 5
MANAGER LEVEL ........................................................................................................................................... 7
SALARY STRUCTURES OF LARSEN & TOUBRO AND SIEMENS ................................................................... 7
COMPARATIVE ANALYSIS .......................................................................................................................... 8
GM LEVEL .................................................................................................................................................... 10
SALARY STRUCTURE OF LARSEN & TOUBRO ........................................................................................... 10
RECOMMENDATIONS ................................................................................................................................. 13
BASIC SALARY .......................................................................................................................................... 13
ALLOWANCES .......................................................................................................................................... 14
VARIABLE PAY ......................................................................................................................................... 14
SALARY STRUCTURE OF AN ENTRY LEVEL EMPLOYEE............................................................................. 14
SALARY STRUCTURE OF A MANAGER ..................................................................................................... 15
SALARY STRUCTURE OF A GENERAL MANAGER ..................................................................................... 16
2|Page
ENTRY LEVEL
LARSEN & TOUBRO
SALARY COMPONENTS
Components of the salary
Amount (INR)
Percent of CTC
Basic
120000
HRA
60000
50
Conveyance
36000
6.07
180000
30.35
75000
12.64
Special Allowance
Team Performance Bonus
Total Base (A)
471000
INCENTIVES AND ALLOWANCES
Components
LTA
Amount (INR)
Percent of CTC
20,000
3.37
6,000
1.01
Medical
36,000
6.07
CCA
60,000
10.11
Telephone
Total Incentives (B)
1,22,000
Total (A+B)
5,93,000
3|Page
SIEMENS
SALARY, ALLOWANCES AND INCENTIVES COMPONENTS
Components
(A)
Basic Salary
Amount
Amount
Percent
(INR p.m.)
(INR p.a.)
of CTC
11696
140352
Allowances / Benefits
House Rent Allowance
5,848
70176
50
Conveyance Allowance
1,100
13200
3.3
Medical Allowance
1,250
15000
3.75
Special Allowance
6,048
72576
18.14
Leave Travel Allowance (#)
1,333
15996
3.99
Total Allowances/Benefits
15,579
186948
Base Pay (A+B)
27,276
327300 (C)
81.82
16,843
4.21
6,751
1.68
23,594 (D)
5.89
Based on Basic
pay
Based on target
Pay
(B)
Retiral Benefits (Annual)

Company's Contribution to PF (12%
of Basic Salary)
Company's Gratuity Provision
(4.81% of Basic Salary)
Total Retiral Benefits
(E)
(F)
Total Fixed Pay (TFP) (C+D)

Performance Pay @ 100% p.a. on
Base
3,50,904
49,096
4,00,000
(G)
Target Pay p.a. (E+F)
4|Page
SCHNEIDER ELECTRIC INFRASTRUCTURE LIMITED
SALARY, ALLOWANCES AND INCENTIVES COMPONENTS
EARNINGS
Amount (INR p.m.) Amount (INR p.a.) Percent of CTC
Basic
14,455
1,73,460
HRA
7,227
86,724
49.99
800
9,600
2.59
10,456
1,25,472
33.90
Rs. 32,938
3,95,256
1,735
20,820
5.62
360
4,320
1.16
2,095
25,140
Rs. 30,843
3,70,116
CONVEYANCE ALLOWANCE
SPECIAL ALLOWANCE
Total
DEDUCTIONS
PF
CANTEEN
Total
Net Salary
COMPARATIVE ANALYSIS
Schneider Electric Infrastructure Limited, L&T and Siemens are in transformer industry but still their
compensation structure varies.
Particulars
L &T
Siemens
Schneider
50%
50%
50%
Conveyance
6.07%
3.3%
2.6%
Special allowance
30.35%
18.14%
34%
Medical Allowance
6.07%
3.75
N\A
Leave Travel Allowance
3.37%
4%
N\A
HRA
5|Page
From the above table it can be seen as in HRA all the companies have a standard of 50% of Basic, but
variance is there w.r.t. conveyance and special allowance. Where in L&T conveyance is 6% in Schneider
it is 2.6% only.
Siemens pays a special allowance of only 18.14% as compared to other to companies which pay a
significant amount of 30%-34% of total pay.
Schneider as compared to other two companies does not pay Medical allowance and LTA.
6|Page
MANAGER LEVEL
SALARY STRUCTURES OF LARSEN & TOUBRO AND SIEMENS
SNo.
Amount
Heads of Payment
L&T
(A)
Basic Salary p.m.
(INR)
Siemens
25,000
29,241
10,000
14,621
15,000
1,100
Medical Allowance
3,000
1,250
Special Allowance
25,000
20,645
Telephone
1,000
CCA
7,500
Education Allowance
1,500
8,333.33
30,000
1,333
Allowances / Benefits p.m.
Loan
(B)
Total Allowances / Benefits p.m.
10,1333.33
38,949
(C)
Base Pay p.m. (A+B)
12,6333.33
68,190
(D)
Base Pay p.a. (C*12)
15,16000
81,8280
Company's Contribution to PF (12% of Basic Salary)
36,000
42,107
Company's Gratuity Provision (4.81% of Basic Salary)
14,430
16,878
(E)
Total Retirals p.a.
50,430
58,985
(F)
Total Fixed Pay (TFP) p.a (D+E)
15,66,430
8,77,265
Ecal & Reptation Pay
10,00,000
Performance Bonus
1,50,000
1,22,741
Retirals (Annual)
(G)
Max Variable Component
11,50,000
1,22,741
(H)
Target Pay p.a. (F+G)
27,16,430
10,00,006
(I)
Target Pay p.m.
2,26,369.16
83,333.83
7|Page
COMPARATIVE ANALYSIS
S.No
Heads of Payment
As % Of Basic Salary
(per month)
L&T
(A)
Basic Salary p.m.
Medical Allowance
Special Allowance
Telephone
CCA
Education Allowance
Loan
Total Allowances / Benefits
(B)
p.m.
(C)
Base Pay p.m. (A+B)
(D)
Base Pay p.a. (C*12)
Retirals Annual
(E)
Total Retirals p.a.
Total Fixed Pay (TFP) p.a
(F)
(D+E)
Performance Bonus
(G)
(H)
Target Pay p.a. (F+G)
(I)
Target Pay p.m.
40.00
Siemens
As % Of Target Pay
(per annum)
L&T
Siemens
50.00
55.81
81.83
1.86
5.90
57.67
87.73
42.33
12.27
As % Of Target Pay
(per month)
L&T
Siemens
11.04
35.09
4.42
6.63
1.33
11.04
0.44
3.31
0.66
3.68
13.25
17.55
1.32
1.50
24.77
0.00
0.00
0.00
0.00
1.60
44.76
55.81
46.74
81.83
The composition of the salary structure of manager sales in transformer industry varies with the
company they are working in. For example, as illustrated above, the HRA varies between 40% and 50%
in Larsen and Tourbo and Siemens. The ratio of variable to fixed pay also varies from company to
company. Larsen and Tourbo emphasize more on variable pay, which is similar to industry pattern for
sales whereas in Siemens the fixed component is more. The max variable component in LNT is around
43% while in Siemens its only 12%.
8|Page
9|Page
GM LEVEL
SALARY STRUCTURE OF LARSEN & TOUBRO
Components of the salary
Amount (INR)
Percent of CTC
Basic
6,00,000
HRA
2,40,000
40
Conveyance
2,40,000
5.384
Special Allowance
4,00,000
8.973
Performance Bonus
3,00,000
6.729
2,00,0000
44.86
Total
Incentives and Allowances
37,80,000(A)
Amount (INR)
Percent of CTC
Uniform Allowance
LTA
50,000
1.122
Telephone
24,000
0.538
1,00,000
2.243
1,74,000(B)
3.903
24,000
0.538
CCA
1,80,000
4.038
Loan
3,00,000
6.729
Medical
Food Coupons
TOTAL
Education Allowance
TOTAL
TOTAL SALARY (A+B+C)
10 | P a g e
5,04,000(C)
44,58,000
SALARY STRUCTURE MADE BY THE GROUP

ENTRY LEVEL
Components
Basic
HRA
Conveyance
Spl. Allowance
Amount (In Rs. p.a) % of CTC

1,62,000
81,000
96,00
47,113
36
18
2.13
10.46
Variable

54,000
Allowance Kitty
Food Coupons
Medical Allowance
LTA
Telephone
CCA
Total Incentives
48,000
15,000
12,000
PF
Gratuity
13,495
7,792
39,321
Special Allowance
Uniform Allowance
Entertainment Allowance
Messing Allowance
Total
11 | P a g e
40%
organisational
performance
60% Unit
12 performance
10.66
3.33
2.66
0
0
0
0
2.99
1.73
0
0
0
4,50,000
40,000
5,000
2,713
47,713
Going by the industry analysis at the entry level, we come to a conclusion that L&T is the market leader
and the median pay for the entry level is hovering somewhere around Rs. 4,00,000. So, we decided to
keep ourselves at 112th percentile of the median.
The team performance bonus is a total of 12% of the total pay. This 12% is further divided into 40%
organizational performance and 60% unit performance. This gives us the internal alignment for the role.
Calculate Tax if you can.
MANAGER LEVEL
Heads of Payments
Basic Salary p.m.
Individual Components

Medical Allowance
Special Allowance
Telephone
Food Coupons
Education Allowance
Loan
Total Allowances / Benefits p.a.
Base Pay p.a.
Retirals Annual
Company's Contribution to PF
(12% of Basic Salary)
Total Retirals p.a.
Total Fixed Pay (TFP) p.a
Performance Bonus
12 | P a g e
Amount (In Rs. p.a) % of CTC

400000
25.00
0.00
200000
12.50
9600
0.60
15000
0.94
78160
4.89
25000
1.56
48000
3.00
25000
1.56
200000
12.50
12000
0.75
612760
38.30
1012760
63.30
48000
3.00
19240
67240
1080000
1.20
4.20
67.50
520000
32.50
Comment [V1]: Something on these lines.

Target Pay p.a.
Special Allowance
Uniform Allowance
Fuel
Entertainment
Allowance
Messing Allowance
Total
520000
1600000
40000
30000
5000
3160
78160
Formatted: Heading 1
Formatted: Font: (Default) +Headings

(Cambria), 14 pt
RECOMMENDATIONS
Formatted: Font: (Default) +Body (Calibri), 11
pt, Not Bold
With the analysis of salary structures, we have come up with the salary structure for an entry
Formatted: Line spacing: 1.5 lines
level employee, manager and general manager for a company involved in transformer sales.
The components across the levels are divided into following buckets
Basic salary
Allowance kitty
Special allowance
Variable component
Retiral Benefits
The components would vary across the levels.

We have adopted a Flexible compensation plan (Cafeteria plan) for the compensation
structure across levels. This would allow the employee to design his allowance according to his
needs, which would lead to employee satisfaction.
BASIC SALARY
Every employee would be paid a fixed amount of basic salary depending on the level he falls.
13 | P a g e
Formatted: Font:
ALLOWANCES
Formatted: Font: Not Bold
Every employee will be given fixed amounts for
Allowance kitty
Special allowance
List of allowances for allowance kitty & special allowance
The employee will have the discretion to opt for allowances of his choice in the allowance
kitty and special allowance. Employee may also restructure the amount between the
allowances in each bucket. The components in each of the bucket would vary across every level.
VARIABLE PAY
The variable pay across the levels will be disbursed based on the following to factors:
Unit Performance
Company performance
Weight age for the Unit performance would be 60 % while that of the companys performance
would be 40 %. This was a common trend observed across organizations involved in transformer
business.
SALARY STRUCTURE OF AN ENTRY LEVEL EMPLOYEE
Formatted: Heading 2
Formatted: Font: Not Bold
Allowance Kitty
Total Allowance kitty

Special Allowance
Total Fixed Salary
14 | P a g e
COMPONENTS
Basic
HRA
Conveyance
Food Coupons
Medical Allowance
LTA
Special Allowance
Amount (INR)
1,62,000
81,000
9,600
48,000
15,000
12,000
1,65,600
47,113
3,74,713
% OF CTC
36.00
18.00
2.13
10.67
3.33
2.67
36.8
10.47
83.27
Formatted: Centered
Formatted Table
Variable
Retiral Benefits

PF
Gratuity
CTC
Special Allowance
Uniform Allowance
Messing Allowance
54,000
12.00
13,495
7,792
4,50,000
3.00
1.73
Amount (INR)
40,000
5,000
2,713
Going by the industry analysis at the entry level, we come to a conclusion that L&T is the market
leader and the median pay for the entry level is hovering somewhere around Rs. 4,00,000. So, we
decided to keep ourselves at 112th percentile of the median.
The team performance bonus is a total of 12% of the total pay. This 12% is further divided into
40% organizational performance and 60% unit performance. This gives us the internal alignment
for the role.
SALARY STRUCTURE OF A MANAGER
Allowance Kitty
Total Allowance Kitty

Special Allowance
FIXED SALARY
Variable Salary
15 | P a g e
COMPONENTS
Basic Salary p.m.
Medical Allowance
Telephone
Food Coupons
Education Allowance
Loan
Special Allowance
Performance Bonus
INR
% OF NET SALARY
4,00,000
25.00
2,00,000
12.50
9,600
0.60
15,000
0.94
25,000
1.56
48,000
3.00
25,000
1.56
2,00,000
12.50
12,000
0.75
5,34,600
33.41
78,160
4.89
10,12,760
63.30
5,20,000
32.50
Comment [V2]: Something on these lines.
Retirals Annual
Company's Contribution to PF
Total Retirals p.a.
CTC
Special Allowance
Uniform Allowance
Fuel
Messing Allowance
48,000
3.00
19,240
1.20
67,240
16,00,000
4.20
Amount (INR)
40,000
30,000
5,000
3,160
SALARY STRUCTURE OF A GENERAL MANAGER
Heads of Payments
Allowances Kitty
Individual Components
Basic Salary
4,80,000
15
2,40,000
7.5
9,600
0.3
Medical Allowance
15,000
0.47
Telephone
40,000
1.25
Food Coupons
48,000
1.5
Education Allowance
25,000
0.78
4,00,000
12.5
Loan
Total Allowances Kitty
Special Allowance
Amount (In Rs. % of

p.a) CTC
Special Allowance
12,000
0.38
149600
24.68
4,09,712
12.8
0
Company's Contribution
to PF
Retirals Annual
Company's Gratuity
Provision
Total Retirals p.a.

Performance Bonus
16 | P a g e
57,600
1.8
23,088
0.72
80,688
2.52
14,40,000
45
CTC
Special Allowance
Uniform Allowance
Fuel
International travel allowance
Driver Allowance
Total
17 | P a g e
32,00,000
Amount (INR)
40,000
50,000
5,000
2,00,000
1,14,712
4,09,712

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MANAGERIAL COMPENSATION

SALARY ANALYSIS- TRANSFORMER SALES

Components of the salary

INCENTIVES AND ALLOWANCES

Total Incentives (B)

Leave Travel Allowance (#)

Base Pay (A+B)

Retiral Benefits (Annual)

Total Fixed Pay (TFP) (C+D)

Target Pay p.a. (E+F)

SCHNEIDER ELECTRIC INFRASTRUCTURE LIMITED

SALARY, ALLOWANCES AND INCENTIVES COMPONENTS

Amount (INR p.m.) Amount (INR p.a.) Percent of CTC

Leave Travel Allowance

Basic Salary p.m.

House Rent Allowance

Allowances / Benefits p.m.

Total Allowances / Benefits p.m.

Base Pay p.m. (A+B)

Base Pay p.a. (C*12)

Company's Contribution to PF (12% of Basic Salary)

Company's Gratuity Provision (4.81% of Basic Salary)

Total Retirals p.a.

Total Fixed Pay (TFP) p.a (D+E)

Ecal & Reptation Pay

Max Variable Component

Target Pay p.a. (F+G)

Target Pay p.m.

Ecal & Reptation Pay

Incentives and Allowances

SALARY STRUCTURE MADE BY THE GROUP

Amount (In Rs. p.a) % of CTC

Team Performance Bonus

House Rent Allowance

Amount (In Rs. p.a) % of CTC

Comment [V1]: Something on these lines.

Max Variable Component

Formatted: Font: (Default) +Headings

Formatted: Line spacing: 1.5 lines

The components would vary across the levels.

Formatted: Font: Not Bold

Every employee will be given fixed amounts for

List of allowances for allowance kitty & special allowance

SALARY STRUCTURE OF AN ENTRY LEVEL EMPLOYEE

Total Allowance kitty

Team Performance Bonus

SALARY STRUCTURE OF A MANAGER

Total Allowance Kitty

Comment [V2]: Something on these lines.

SALARY STRUCTURE OF A GENERAL MANAGER

House Rent Allowance

Amount (In Rs. % of

Total Retirals p.a.

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