Reckitt Benckiser to have profit-sharing arrangement with its India E-commerce staff
- April 19, 2016
- Category: Business plans
Reckitt Benckiser (RB), the maker of Dettol and other health and hygiene products, has kicked off a profit-sharing arrangement for its ecommerce team to drive growth and be among the first to take advantage of online grocery sales in India.
In China, the ecommerce channel already contributes up to 30% to RB’s overall sales. This is the first time RB has offered profit sharing as part of its compensation for employees across levels and will be in addition to routine bonuses.
The step is aimed at fuelling profitable growth and giving employees “ownership”, RB South Asia regional HR director Udayan Dutt said. “Focus on performance and rewarding superior achievement has been an integral part of RB’s systems and culture,” he said. The profit-sharing programme covers five employees of the company’s ecommerce team from the sales, marketing and digital functions.
So far, profit-sharing had been restricted to a component of the variable pay of part of the leadership team. An RB spokesperson said there would be a cap at a specific level, declining to divulge details.
He said the pay-out would be based on net revenue and gross margin achievement against targets. The move could be one of the first such ones among consumer goods companies in the country, according to Vibhav Dhawan, managing partner at search firm Positive Moves Consulting.
“Reckitt Benckiser is known to have always had an aggressive incentive policy. So far, grocery ecommerce has been nascent in India but moves such as these indicate that consumer goods firms are aggressively looking to tap multiple channels by shoppers,” he said. Junior employees at the Indian arm of the British healthcare products maker can earn up to 40% of their fixed salary as bonus, while for the top management, the maximum bonus could be as much as one and a half times the fixed salary.
Almost 150 million consumers will spend about $40 billion on grocery shopping by 2020, according to a report by the Boston Consulting Group and the Confederation of Indian Industry. The emergence of channels such as ecommerce, the proliferation of Internet connectivity and consumption of digital media will reshape the FMCG sector, the report said. “Ecommerce in Indian FMCG will be bigger than the modern trade channel in the next few years,” BCG senior partner and director Abheek Singhi had said while releasing the report four months ago.