Answer to Question #331017 in Management for Jack Patz

Question

Mr Suresh Deshpande is the M.D of Rashmi Electricals which manufactures

various electrical components for the auto industry. It is a mid-sized company, (set-up in

the 90’s) employing about 200 people and its products are well known for its quality. Upto

2019 this company was making good profits and therefore it could pay its employees well

above the market average.A major component of this pay package were the benefits (like reimbursing school fees for employee’s children, free lunch, free transport) which attracted many talented workmen to the factory. However, after 2019, the profits started dwindling mainly because of competition, increased imports from China and the Corona pandemic. So, a few days ago Mr Deshpande called Mr lala, his HR Manager to stop all the different benefits given to the employees as these were adding to the costs in a big way.

From a Compensation point of view, explain how should Mr Roberts prepare adequate logic to convince Mr Suresh regarding which benefits to retain or discard.