Review the Compensation Structure for a Multinational Bank

market assessment

Client Challenge

The client requested UC Strategy to set up a new compensation model as part of a post-merger integration exercise. The client also needed to understand the Compensation philosophy in India, the most effective and efficient compensation delivery model for each business and the impact on support units. It also required details on the portion of total cost to be paid at risk, compensation strategy driving preferred behaviours, the benchmarking philosophy of various industries. Eventually, it also required the efficiency and effectiveness of compensation and reward strategy be measured.

Our Approach

As part of the compensation review exercise, UC Strategy reviewed the following:

  • The rationale for the current compensation structure and its drivers
    • Compliance with local laws (Gratuity and Provident Fund Act)
    • Need to provide a tax efficient compensation delivery mechanism
    • Need to align to local market and Bank’s Group practices worldwide
  • Conducted internal analysis by business and levels to understand the following
    • Headcount and people profile (Count and Leverage Ratios)
    • Total Employee Cost (TEC) break-up
    • The utilisation of various elements of allowances, benefits, variable pay coverage etc.
  • Conducted a benchmarking exercise with the following:
    • Local market practices with respect to quantum, structure, methods and policies
    • Prevalent practices and structure of the bank’s group world-wide
  • Assessed bank’s positioning vis-à-vis the market and bank’s group world-wide and identified issues
  • Identified alternative solutions and conducted ‘What-If’ scenario analysis for each issue
  • Evaluated each scenario on the following parameters
    • Financial impact of each scenario
    • Impact of the bank’s competitive positioning vis-à-vis the market
    • Impact of the scenario on employee morale and retention of talent
    • Cost of administration, ease of implementation etc.

Our Impact

UC Strategy designed the compensation philosophy and obtained buy-in and sign-off from key stakeholders.

 

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