Reliance Industries Limited (RIL) follows a compensation structure that aims to attract and retain top talent through competitive pay. The structure includes basic pay, allowances for housing, travel etc., performance-linked bonuses and long-term incentives. RIL benchmarks its compensation against peer companies to ensure pay equity. Employees are also provided various benefits like a generous leave policy, long service awards, retirement benefits and short-term incentives based on sales, profits and other metrics. RIL's compensation philosophy is aligned with expectancy and equity theories by rewarding performance appropriately and maintaining pay parity.
Reliance Industries Limited (RIL) follows a compensation structure that aims to attract and retain top talent through competitive pay. The structure includes basic pay, allowances for housing, travel etc., performance-linked bonuses and long-term incentives. RIL benchmarks its compensation against peer companies to ensure pay equity. Employees are also provided various benefits like a generous leave policy, long service awards, retirement benefits and short-term incentives based on sales, profits and other metrics. RIL's compensation philosophy is aligned with expectancy and equity theories by rewarding performance appropriately and maintaining pay parity.
Reliance Industries Limited (RIL) follows a compensation structure that aims to attract and retain top talent through competitive pay. The structure includes basic pay, allowances for housing, travel etc., performance-linked bonuses and long-term incentives. RIL benchmarks its compensation against peer companies to ensure pay equity. Employees are also provided various benefits like a generous leave policy, long service awards, retirement benefits and short-term incentives based on sales, profits and other metrics. RIL's compensation philosophy is aligned with expectancy and equity theories by rewarding performance appropriately and maintaining pay parity.
Reliance Industries Limited (RIL) follows a compensation structure that aims to attract and retain top talent through competitive pay. The structure includes basic pay, allowances for housing, travel etc., performance-linked bonuses and long-term incentives. RIL benchmarks its compensation against peer companies to ensure pay equity. Employees are also provided various benefits like a generous leave policy, long service awards, retirement benefits and short-term incentives based on sales, profits and other metrics. RIL's compensation philosophy is aligned with expectancy and equity theories by rewarding performance appropriately and maintaining pay parity.
Reliance Industries Limited (RIL) is a global Indian conglomerate with headquarters in
Mumbai, Maharashtra. Reliance owns oil, petrochemical, textile, natural resources, retail, and telecommunications enterprises throughout India. Reliance is one of India's most profitable companies, India's biggest publicly traded company by market capitalization, And India's largest company as calculated by sales, having recently surpassed the government-controlled Indian Oil Corporation. On 18 October 2007, Reliance Industries became the first Indian corporation with market capitalization exceeding $100 billion. As of 2019, the company is ranked 106th on the Fortune Global 500 list of the world's largest companies. As of 2016 it has been ranked 8th among the Top 250 Platts Global Energy Firms. Reliance remains India's largest exporter, accounting for 8 per cent of India's overall exports of merchandise with a value of Rs 147,755 crore and market access in 108 countries. Reliance is responsible for about 5 percent of India's government's gross customs and excise duty revenues. This is also the largest private sector income tax payer in India. In 2019, Reliance Industries became the first Indian company to reach the market valuation mark of Rs 9 lakh Crore. It has been the first Indian company ever to achieve market capitalization of Rs 10 lakh crore.
4 Some facts about RIL-
⮚ Reliance Industries was the first Indian company to reach market
capitalization of $100 billion. As of 2019, the company is ranked 106th on the Fortune Global 500 list of the world's largest companies. ⮚ As on 31 March 2019, the company had 194,056 employees, the company had 29,533 permanent employees of which 1,521 were women and 70 were employees with disabilities and the rest were temporary employees. ⮚ Reliance is one of the most profitable companies in India. ⮚ Reliance has seven major plants in India, including the Jamnagar plant, the world's largest single refinery with daily capacity of 1.25 million b/day ⮚ The largest publicly traded company in India by market capitalization. ⮚ The largest company in India as measured by revenue. ⮚ Reliance continues to be India's largest exporter, accounting for 8% of India's total merchandise exports ⮚ In a short period of 170 days Jio crossed a milestone of 100 million customers on its all IP wireless broadband network. ⮚ Subsidiaries- Reliance Jio, Reliance Retail, Jiosaavn, Reliance petroleum.
5 RELIANCE BUSINESS DISCIPLINE
Reliance follows the business discipline that is a mix of Customer Intimacy and Product Leadership.
With the introduction of Reliance Jio, it was a clear example of the company trying to build, grow and sustain its business by providing its customers with the “Best Total Solution” to its customers, hence following the discipline of Customer Intimacy. Not just the Customers, the organization implements its business in such a manner that it values its shareholders, the employees and the society as a whole, as per the text written on the company website.
The company has several businesses in the textile domain and has also acquired several “top of the line” businesses that indicate the company’s strategic functioning to be “Product Leadership”. As is reflected by the awards list, Reliance has achieved several awards for its “Quality” of products and is moving towards innovation as is evident by the various patents registered by the company.
A perfect example to justify Reliance’s business strategy as a mix of Customer
Intimacy and Product Leadership would be Reliance Digital getting appreciated by receiving “Most Admired Consumer Electronics Retailer of the Year” at IMAGES retail Awards, 2018. This goes on to show that Reliance Digital, the Product leadership brand of Reliance which comes under retail electronic stores, has also shown great levels of Customer Intimacy to be the most admired retail store. This is just one of the many examples which are in store for Reliance.
Therefore, with a mix of Product Leadership and Customer intimacy, a similar
Strategy is reflected in compensation for Reliance’s employees. The Employees are expected to be paid above the market rate to encourage the best talent, which can be used for innovation and experimentation, along with providing employees a share of wallet and revenue growth to increase customer intimacy and to put more skin in the game.
6 COMPENSATION STRUCTURE The average Reliance Industries Ltd monthly salary ranges from approximately ₹ 10,000 per month for Field Executive to ₹ 60,000 per month for Engineering Manager. The average Reliance Industries Ltd salary ranges from approximately ₹ 1,47,087 per year for Payroll Coordinator to ₹ 13,19,071 per year for Senior Engineer. (source:https://www.indeed.co.in/cmp/Reliance-Industries-
Ltd/salaries)
PAY STRUCTURE
Amount(PA) in Total Pay Components INR
A.Basic Pay
B.Choice Pay
1) Direct Payments
Conveyance Allowance
House Rent Allowance
Child Education Allowance/Child Hostel Allowance
Fuel & Maintenance
Leave Travel Assistance
Office Wear Allowance
Medical Reimbursement
Bonus
Personal Special Allowance
Residual Choice Pay
7 Total Direct Payments----
2) Indirect Payments
Food Coupons
Gift Voucher
NPS Contribution
Superannuation
Total Indirect Payments---
Total Choice Pay--Total (1)+(2)
C.Debits on account of
Medical Insurance Premium
GPA Insurance Premium
Group Term Life Insurance Premium
Housing COA/CLA
Lease Car Rental/Vehicle EMI
Car Insurance
White Goods/Other Assets Debit
Total Other Costs---
D.Retiral Costs
Provident Fund
Gratuity
Total Costs of Retirals---
E.Fixed Pay (A+B+C+D)
8 F.Other Payments
Annual Cash Bonus OR Performance Linked
Incentive
Deffered Cash Bonus (Annualised)
Long Term Incentive Plan (Annualised)
Retention(Annualised)
City Compensatory Allowance
Special Awards
Total Other Payments---
TOTAL PAY(E+F)
9 COMPENSATION THEORIES AND THE PRACTICES
Benefits offered by Reliance Industries Limited
Telephone Policy
Employees are given phone sets of range 10,000 to 30,000 according to their ranks and this can be renewed every 3 years.
Corporate Connection Plan
Employees are given unlimited calls and data plan for enabling employees to work better.
Car Leased Vehicle
With the help of a third party the company helps the employees who want to buy a car by deducting the emi beforehand so that they do not need to pay tax on it.
Leave Policy
RIL gives its employees best in class holidays and all the leaves can be carry forwarded.
Employee get 28 days apart from 10-15 public holidays.
1. Paid Leaves = 15 (can be saved and carry forward)
2. Contingency Leaves = 5 (Lapsed at end of the year) 3. Sick Leaves = 5 (can be saved and carry forward) 4. Optional Paid Holidays = 3 (Lapsed at end of the year) 5. CompOffs = will be generated if you work overtime or on weekends & public holidays (lapsed one year after generated date) 6. Pay for performance , LTI, STI, field force incentives etc (where applicable)
Long Service Awards
This retention measure, christened Long-Term Incentive Plan (LTIP), will be for the high potentials in the group who earn Rs 2 crore on an average.
Also, these employees are awarded with silver medal which is very prestigious.
10 Retirement Benefits Retiring from RIL is always a prestige as employee gets many benefits. Generally, gratuity accrues at a rate of 15 days last drawn salary per year of service for each employee or as defined by the trust deeds. Gratuity is payable immediately on cessation of employment, provided the employee has continuous service of at least five years.
Short Term Incentives
RIL provides short term incentives termed as monthly incentives or quarterly incentives paid on monthly or quarterly basis on the following criteria:
● SALES
● EBITDA
● PROFITABILITY
● MARGINS
● BRAND/CATEGORY INCENTIVE
● PIECE BASED
● SHRINKAGE
Compensation theories
Expectancy theory
Since the employees are supposed to work harder and better, RIL pays higher salary higher than the average market rate so that the employees feel that their work is being valued and they are getting the reward for it.
Equity Theory
They use external equity theory to compare their compensation it's obviously higher, giving them a sense of giving greater output.
11 COMPARATOR BASKET Comparator Basket is basically choosing peer companies or competitors in a specific area and comparing their different parameters with own company to assess where it stands and also to determine how to improve their performance in that area.
For Reliance Industries Limited, they mainly operate in 6 areas. And for each area we have taken their competitor based on compensation pay in the comparator basket.
12 Exploration and Production
In this area the main competitors of RIL are ONGC, Hindustan Oil and Oil India. In the comparator basket we have taken their compensation pays and RIL’s compensation pay and compared them where we have found that Hindustan Oil provides the highest amount of compensation pay.
Reliance ONGC Hindustan Oil Oil India
Rs.20lakhs Rs.20.6lakhs Rs.21 Lakhs Rs. 9.1 Lakhs
Petroleum Refining and Marketing
In this are the main competitors are Indian Oil and Hindustan Petroleum and from the comparator basket we have found that Hindustan Petroleum and RIL have same amount of compensation pay and Indian Oil provides less amount.
Reliance Indian Oil Hindustan Petroleum
Rs. 20 Lakhs Rs.10 Lakhs Rs. 20 Lakhs
Textiles
In this area the main competitors of RIL are Bombay Dyeing and Raymond Ltd. and from the comparator basket we have found RIL provides the highest amount of compensation pay.
13 Reliance Bombay Dyeing Raymond Ltd.
Rs. 20 Lakhs Rs. 10.4 Lakhs Rs. 18.1 Lakhs
Petrochemicals
In this area the main competitor of RIL is Haldia Petrochemicals and from the comparator basket we have found that RIL provides more compensation pay than Haldia Petrochemicals.
Reliance Haldia Petrochemicals
Rs. 20 Lakhs Rs. 13.3Lakshs
Retail
Here the main competitors are Aditya Birla and Shoppers Stop and from the comparator basket we have found that Aditya Birla provides the highest amount of compensation pay.
Reliance Aditya Birla Shoppers Stop
Rs. 20 Lakhs Rs. 21.2 Lakhs Rs. 3.92Lakhs
Jio
In this area the competitors are Airtel and Vodafone and from the comparator basket we have found that RIL provides the highest amount of compensation pay.
Reliance Airtel Vodaphone
Rs. 20 Lakhs Rs. 7.43 Lakhs Rs. 7.34 Lakhs
14 Therefore, a comparison for the above mentioned sectors would be:
