[apachelongbow]

Originally Posted by neoonwheels

VRS is kind of safest alternative to politely asking people to make a move. It might as well turn out good for employees nearing retirement.

High time they came out with an appealing design and fresh and good looking interiors on their cars. Why so obsession with the ugly India/Indigo design language. Storm interiors still compete with trucks and buses rather than XUV. I hope Karl would be able to turn tables for this marquee.

I agree on the VRS although it will get rid of only oldies nearing retirement. The middle aged unproductive workers need to be chucked out manually.

Indica/Indigo designs are fit for the purpose, that is to make cabs, on the other hand, the Vista and Manza both have good interiors and customers don't have any complaints on them.
Regarding Storme's interiors from what I have seen, it is a far classier design than the garish bling bling Mahindra design, with clashing elements, loud colors and neon lighting. May be the problem is Indian's not liking simple, elegant or understated designs?

[zenren]

In most cases, VRS offered among senior management has backfired on the companies.

The aim of VRS is to give an attractive enough offer to the middle level and senior management so that the inefficient ones would avail it and quit the organization.

In most cases, what really happens is that the most efficient employees are the first to agree for this attractive package. Thanks to their quality, they'll not face any difficulty in finding another attractive job elsewhere in a very short while. So they'll get this package as a bonus and get similar package like what they got in Tata at their new job. If they'll get full pension too, then nothing like it!

The inefficient folks however know that it is not likely for them to get a good job elsewhere and would be reluctant to opt for the VRS and might continue.

A lot of banks offered VRS in the past and ended up with the above situation where most of the good people retired and all the inefficient ones remained in the system. Those who retired get full pension and the additional salary from their new employment that they joined in a few months.

I hope history doesn't repeat itself at Tata Motors.

[GTO]

Originally Posted by zenren

In most cases, what really happens is that the most efficient employees are the first to agree for this attractive package.

A lot of banks offered VRS in the past and ended up with the above situation where most of the good people retired and all the inefficient ones remained in the system.

Very informative. Question: Can VRS be offered selectively to employees? That way, the HR can target only the inefficient / unproductive staff?

[Latheesh]

Originally Posted by GTO

Very informative. Question: Can VRS be offered selectively to employees? That way, the HR can target only the inefficient / unproductive staff?

Then it is not called VRS but Forced retirement.

What HR does is to put direct/indirect pressure on non performing/older employees to opt for VRS.

[zenren]

Originally Posted by GTO

Very informative. Question: Can VRS be offered selectively to employees? That way, the HR can target only the inefficient / unproductive staff?

If its applicable only for select people who are inefficient, then it is no longer 'voluntary'. It would only be like the practice of 'forced resignation'. If it is available only for the inefficient staff, it would by default stamp anyone who took VRS as inefficient and the employees are unlikely to be willing to take up such a social stigma which can also hinder their future job prospects.

If those employees take the union route or legal route, things could get really ugly in no time. Unlike the multinational companies in the software field who would have drafted carefully worded employment contracts, I doubt if the contracts signed by Tata employees 20 years back had all those loopholes covered.

[Maverick79]

Originally Posted by zenren

If its applicable only for select people who are inefficient, then it is no longer 'voluntary'. It would only be like the practice of 'forced resignation'. If it is available only for the inefficient staff, it would by default stamp anyone who took VRS as inefficient and the employees are unlikely to be willing to take up such a social stigma which can also hinder their future job prospects.

If those employees take the union route or legal route, things could get really ugly in no time. Unlike the multinational companies in the software field who would have drafted carefully worded employment contracts, I doubt if the contracts signed by Tata employees 20 years back had all those loopholes covered.

Correct!
Its only offered to select people and not called as VRS but a 'Special Package'.
Mostly targeted above 50 years aged as mentioned earlier.
Also, this is only for Staff and not the non - bargainable i.e Union employees.
Mostly targeted at those people who are not performing for the last 1 or two years consistently.
Sorry for those, But, It is the wake up call for others too, who are on the border line to perform immediately.

I understand, some 200 Executive grades were offered CRS. EG means - who are offered a company car. Minimum AGM levels.
The new leadership has changed many people's perceptions to the roots.
It's no more a heaven for Lazy people. One way its good for the company. IMHO. Not to hurt any body please.

[audioholic]

Originally Posted by zenren

In most cases, VRS offered among senior management has backfired on the companies.

The aim of VRS is to give an attractive enough offer to the middle level and senior management so that the inefficient ones would avail it and quit the organization.

In most cases, what really happens is that the most efficient employees are the first to agree for this attractive package. Thanks to their quality, they'll not face any difficulty in finding another attractive job elsewhere in a very short while. So they'll get this package as a bonus and get similar package like what they got in Tata at their new job. If they'll get full pension too, then nothing like it!

Thats an eye opener. Very much possible too

I think TM must hire some of the guys from TBHP to involve in their decision making. I wonder what runs in their minds when they come up with such schemes. I was not aware that people who take VRS can join another company. Is it really possible to do so? Wouldnt the HR dept consider such circumstances? Is there any sort of clause which may prevent future employment in other companies? Logically I feel its my freedom to work anywhere I want anytime but since in VRS they are offering some benefits to compensate for the early retirement, is it legally possible for the person to work in another company and get paid there also?

[honeybee]

Multiple benefits: weed out inefficiencies, replace costly labour with cheaper one and bring fresh blood and talent into the company. Back when Mr. Anand Mahindra took the reins of M&M from his father he did the same thing. See where it was then and see where it is now.

[zenren]

Originally Posted by audioholic

I was not aware that people who take VRS can join another company. Is it really possible to do so? Wouldnt the HR dept consider such circumstances? Is there any sort of clause which may prevent future employment in other companies? Logically I feel its my freedom to work anywhere I want anytime but since in VRS they are offering some benefits to compensate for the early retirement, is it legally possible for the person to work in another company and get paid there also?

As long as they are not paying full salaries to the retired folks, they cannot prevent future employment. There are provisions for non-disclosure agreements which would protect the companies from the practice of competitors hiring their staff and knowing about their current and future projects. As long as the future employment of the retired employee would in no way be against the current company, there is no reason for the company to be aggrieved.

[apachelongbow]

Originally Posted by GTO

Very informative. Question: Can VRS be offered selectively to employees? That way, the HR can target only the inefficient / unproductive staff?

There are several gray areas under which companies can target unproductive employees. For example, the ones you need to chuck out, can be given dead beat assignments, not appraised properly, transferred multiple times, made to feel un important and unwanted, and when they go to their bosses to complain, a vrs form can be handed over.. likewise when your stars want to use vrs, you can give them special projects, best appraisals, promotions, and other incentives to keep them in.

[deehunk]

Will Tata Motors still be able to makeup after sacking employees, I really doubt this strategy is going to work in favour of them. They were on a downhill from 2-3 years did nothing to get rid of their pathetic line-up of cars, no new trend setting launches, they had one last chance last year when they refreshed their Indica and Indigo models which also they failed. Just by changing the color of interiors no one is going to buy their cars, can't they design a proper dashboard and front console for their cars, their wheel caps looks cheap and design is weird, even the new refreshed Indica Vista launched this month is no different from its old version, so many missed opportunities. The marketing team and their design team probably have a severe miscommunication otherwise they would have not reached such a stage.

[honeybee]

I believe in another thread it has been stated that Tata Motors will be launching the Falcon models in 2014. As a precursor to that they have brought out the Revotron. The Nano Twist has been launched. Still why this bashing?
TaMo isn't sacking people. It's a voluntary retirement scheme. It's most likely launched to get rid of people who haven't been able to innovate and is likely to bring in some new talent as well as save some money which could be used towards better R&D and products.
Simply ranting against TaMo will not help unless you have something constructive to say about the VRS.

[Tushar]

Over the past year, Tata Motors has tried to revive its passenger vehicle segment by offering brand new models such as the Zest and Bolt. Additionally, the brand plans to launch two new vehicles in the passenger vehicle segment annually and multiple new products and variants for its commercial vehicles business. However, low consumer demand, a steep rise in competition and a falling market share have made the brand resort to fat trimming measures. According to an official statement, Tata Motors is offering a voluntary retirement scheme (VRS) to its employees, in order to streamline its operations.

The option is being offered across multiple categories of employees, with the main focus being the workmen at Tata's plants in Jamshedpur, Pune, Lucknow, Sanand, Dharwad and Pantnagar. As per the official release, the move is part of the brands' attempt to "enhance the company's competitiveness" in a market that has seen "depressed growth of the commercial vehicle and passenger car businesses."

The VRS scheme includes a monthly pay-out (Basic + Dearness Allowance) that begins at the date of separation and continues till the employee hits the age of 60. This move provides a monthly income provision as opposed to a one time lump sum pay-out. Employees can also avail of a medical insurance cover for a period of 10 years post separation. These are in addition to normal retirement benefits such as PF, gratuity, superannuation, encashment of unavailed leaves, LTA due but not claimed, etc.

The new scheme will help cut expenses, but in order to improve the brand's financial standing, Tata Motors will have to look at serious moves to bolster sales figures. This task has become all the more difficult with the recent budget declaration that was largely indifferent towards car makers.

[RSR]

Originally Posted by Tushar

The VRS scheme includes a monthly pay-out (Basic + Dearness Allowance) that begins at the date of separation and continues till the employee hits the age of 60. This move provides a monthly income provision as opposed to a one time lump sum pay-out. Employees can also avail of a medical insurance cover for a period of 10 years post separation. These are in addition to normal retirement benefits such as PF, gratuity, superannuation, encashment of unavailed leaves, LTA due but not claimed, etc.

It's good that Tata Motors is providing a decent option to those willing to take VRS. A monthly package sounds better & more practical (for both employer & employee) than a single lump sum amount. It's also nice of them to continue the health insurance cover for 10 more years for such employees. The best thing, of course, is that this is voluntary (as the name suggests).

I guess Bombay House did not want any more controversies after the rumoured / true mass lay-off fiasco at Tata Consultancy Services which brought them bad publicity (warranted or unwarranted). I also believe TCS is free of certain vested interests who claim to stand for the employees' collective bargaining rights. A TCS-like situation would have resulted in Tata Motors' factories across the country coming to a complete grinding halt. I think one can easily understand what I mean.

On a related note, this gives one the idea that the new Chairman of Tata is not averse to taking tough, unpopular decisions when the situation warrants it - something that his predecessor would have have tried to avoid as far as possible.

[Saanil]

Guys,

I have a stupid question - How does this VRS work? What if too many employees leave? Is VRS only offered to employees which the company wants to remove? What if those employees do not accept it?