Country’s largest scooter maker Honda Motorcycle & Scooter India (HMSI) on Tuesday introduced a voluntary retirement scheme (VRS) for its employees above the age of 40 or who have completed 10 years in the company.
The company said it is realigning its production strategy for improved overall operational efficiency with the objective of ‘long term business sustainability’ in these uncertain times.
“In order to maintain existence in this competitive two-wheeler market, it is essential to continue with high effiency and competitiveness. Therefore, keeping in view all the above reasons, the management has introduced a ‘VRS’ for all the associates who want to retire voluntarily from the company before their fixed retirement age, so that they can be relieved from the company gracefully,” Naveen Sharma, Division Head - General Affairs, HMSI, said in a letter to the employees.
BusinessLine has seen the letter.
The Directors of the company are not eligible under this scheme, he wrote.
The scheme will be effective from January 5 and will remain open till January 23. However, the management at its discretion can change the scheme without prior information or notice and may extend its time period, the letter said.
The Management will have full authority to decide in this regard, it said.
As benefits, HMSI has calculated the formula as — three months gross salary into completed year of service, one month’s basic plus Variable Dearness Allowance (VDA) into remaining year of service — and ex-gratia of ₹22,000 into completed year of service.
The first 400 accepted applicants will get ‘early bird incentive’ of ₹5 lakh each and if VRS application exceeds 400, additional ₹4 lakh will be paid to all the applicants, the letter said.
However, the company has also capped the maximum amount for applicants for permanent workmen and Junior Engineer (JE) and above. For instance, for Senior Manager or Vice-President, it has capped at ₹72 lakh, for Manager ₹67 lakh, for Deputy Manager at ₹48 lakh and ₹15 lakh for Assistant Executive.
The scheme will automatically close after January 23, it added.
Started in 2001, HMSI has production facilities at Manesar (Haryana), Alwar (Rajasthan), Narsapura(Karnataka) and Vithalapur (Gujarat) with a combined capacity of 6.4 million units annually.
The ‘Activa’ maker has more than 4,000 employees in Manesar alone.