Starting June, Tata Motors will move to performance-based salary structure

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Tata Motors, one of the country’s largest automakers, will move to a new salary structure next month which will now be driven by a performance-based component aimed at maximising the talent pool.

This is part of the company’s attempt at restructuring operations, which also involved doling out voluntary retirement packages that led to the headcount falling by 1,300 during the final quarter of last year.

“We have changed our performance and leadership evaluation method," said Guenter Butschek, Managing Director of Tata Motors, in an interview to the in-house Tata magazine. We are about to introduce a performance-based remuneration scheme that answers the 'what's in it for me' question. This is a core element in the transformation exercise as we will have a completely new remuneration scheme [it will be rolled out with the salary review in June 2017]”,

The Mumbai-headquartered company has cut business roles and responsibilities according to functions and product lines and platforms under the ‘Organisational Efficiency’ programme which was rolled out on April 1.

The maker of cars, trucks and buses has brought its management structure down to 5 levels from 14. It also has a right-sizing programme that will improve efficiencies and bring "significant" cost savings.

Top executives have been assigned the task of managing new projects under passenger vehicles, commercial vehicles and also under the separate vertical created under the TaMo sub-brand, which is run like a start-up comprising a small group of individuals.

“Now there’s somebody who owns the current and future products, their profit and loss, from cradle to grave. This is critical for our recovery as it talks about our competitiveness and market share," said Butschek.

The former Daimler and Airbus employee who took over Tata Motors operations last year dedicated his focus to improving the brand perception of Tata Motors. The company has been repeatedly held guilty of being lethargic to changing to new consumer preferences which has resulted in its market share, slumping to a third compared to its life time-high of 16 percent.

“What we had earlier were similar sets of problems in both commercial and passenger vehicle businesses. We functioned in silos, were slow in execution, and there was a shortage of accountability. Management made itself the bottleneck in decision-making. These are the flaws we are going after”, added Butschek.

Tata Motors was the leader in innovation not too long ago, with many an industry first’s credited to its name. It was the first company to come out with a locally-made sports utility vehicle (Sierra), multi-utility vehicle (Sumo), station wagon (Estate), sub-4 metre compact sedan (Indigo CS), world’s smallest and cheapest car (Nano).

“Tata Motors does not have a problem with its conceptual competencies; it is in execution that we are rather weak. To become robust and a leader once again, we need coherent objectives and a stringent approach on allocation of accountability and measurement of performance”, said Butschek.