Module 5 : Compensation and Benefits
The IT industry has been a leader in changing traditional compensation practices in India. The industry widely adopts the approach of Cost to Company (CTC) to compensation and is consequently "cash" oriented rather than perquisites oriented. An important aspect of this approach is that there is no differentiation between individual employees based on the type of benefits availed. This is of special importance in an industry where a large number of employees and spouses often work in the same company. This approach has also been successful since a large number of companies are based outside Mumbai where housing has not been a major issue.
Over the years, with aspirations for a better quality of life, employee expectations on benefits and facilities have increased substantially. The initial approach to minimise benefits and let employees deal with their own needs has undergone significant change with the pressure to retain employees. The CTC approach to compensation merely equates employees. Employers still continue to hire houses and lease cars due to tax advantages to the employee. Loans are however not generally directly provided by companies, but subsidised.
