For the case study below, group and identify all the major problem(s) in the case.

COLGATE-PALMOLIVE: DETERMINING A SALARY OFFER Professors Zubin R. Mulla and L. Gurunathan wrote this case solely to provide material for class discussion. The authors do not intend o illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Our goal is to publish materials of the highest quality; submit any errata to publishcases@ivey.ca. Copyright @ 2020, Ivey Business School Foundation Version: 2020-05-06 On March 2012, Aditya Singh, head of compensation for Colgate-Palmolive (India) Limited (Colgate- Palmolive) was poring over five resumes placed in front of him. He had been asked to determine appropriate pay scales for the five candidates so that the hiring process could be completed. Singh knew that the decision had ramifications far beyond the salaries of a few employees. The giant corporation, which was well established in India, had opened various other plants in the past, but the new toothbrush factory in Sri City had just started operations. COLGATE-PALMOLIVE SRI CITY PLANT Colgate-Palmolive was the most trusted brand in India and a leading fast-moving consumer goods (FMCG) company. Its wide-ranging sales and distribution network and strong manufacturing base supported the oral care business across the country. It was the market leader in the oral care segment. With a market share of 57.8 per cent in toothpaste and 42.1 per cent in toothbrushes, Colgate-Palmolive was in a comfortable financial position, with gross revenue for fiscal year 2012 of $28,055 million (see Exhibit 1). Based on its 2020 business growth projections, the company had planned to set up a state-of-the-art toothbrush manufacturing facility in India. The annual estimated capacity of the new plant was estimated at approximately 150,000 tonnes of product, or 220 million toothbrushes. The project team had identified a site in Sri City, in the southern state of Andhra Pradesh, on the border of neighbouring state Tamil Nadu. This area was a manufacturing hub for most FMCG companies. According to initial estimates, the factory planned to employ 500 workers, including both skilled technicians and unskilled line operators (i.e., workers who were not required to have previous skills). At least 70 per cent of these workers would be hired from the local area, consistent with the state government's mandate. The production process for toothbrushes followed a six-stage process: (1) horizontal moulding, (2) vertical moulding, (3) tufting, (4) end rounding and profiling, (5) packing, and (6) case filling and sealing. = INR = Indian rupees; $1 = US$0.01966 as on March 31, 2012.Workers at the plant were divided into six functional groups: {1) projects, (2} operations, (3} technical and engineering, (4} quality assurance, (5) human resources, {6) and commercial. In addition to these six functional groups, an environmental and occupational health and safety group was also active at the plant. CHALLENGES AHEAD Singh pondered the challenges before him. For the new facility to be successful, it was critical to attract, retain, and motivate the best talent. However, most FMCG companies set up their plants in nearby locations, which created an extremely competitive labour market. The manufacturing of toothbrushes was highly labour intensive, unlike the production of toothpaste, which was mainly automated. This facility was designed to be the rst companyowned toothbrush factory in India. The production process involved unique tasks {e.g., moulding, tufting, and endrounding) that required specic skills from workers, who normally worked for smaller firms. To be appropriate for the ColgatePalmolive team, however, employees needed the right technical expertise as well as suitable communication skills. Suitable employees were currently working for different but related companies, such as companies that produced plastic moulding for auto components or bottle making. However, the location of the factory, in southern lndia, made it particularly difficult to attract talented workers from other parts of the country. Singh found that highly skilled employees were reluctant to travel to southern cities in India, mainly because of language issues. Hindi was widely spoken across most of India, but it was not prevalent in the southern regions? Therefore, a Hindispeaking plant supervisor would have trouble communicating with local workers in the factory. Another challenge regarding attracting good workers to the plant was the state requirement for local hiring.3 Although the plant's location was technically in the state of Andhra Pradesh, it was only 10 kilometres from neighbouring Tamil Nadu and not very far (T5 kilometres} from its capital city of Chennai, a strong potential source of workers. These workers could be considered local, even though they lived in another state. Prafulla Bargaje, the head of human resources for ColgatePalmolive's supply chain, had stated that the company's practice was to hire local labour for its plants. In this case, however, it was unclear what geographical boundaries constituted of the plant's local area. Most of the unskilled labourers in the factory were likely to come from the company's own state of Andhra Pradesh. These workers would be predominantly Teluguspeaking employees. Most of the technical and supervisory staff, on the other hand, would likely be from nearby metropolitan Chennai, and would be predominantly Tamilspeaking employees. Therefore, language would be an issue, despite all workers being local, in terms of their distance from the plant. Another challenge was nding workers with the right qualications. Factory labour workers only needed to have completed high school to qualify for positions. However, because of the area's relatively high unemployment rate'1 and the attraction of working for a major multinational corporation, some candidates 2 Ministry of Home Affairs, Government of India. \"Distribution of 10,000 Persons by Language India. States and Union Territories 2011,\" Office of the Registrar General 8' Census Commissioner. lndia, accessed March 20. 2020, httpoensusindiagoviniZO'i 1 CensusiLanguage-Z'i 1!Statement-3.pdf. '3 Sri City, India. Sn' City: An integrated Business CityFAQ Booklet. 4, accessed March 20. 2020. www.sricity.im'wp- contenupioadsJZU'i QIOBIFAQ-BookIet-'I . pdf. ' Ibid. deliberately understated their higher qualifications to attain factory positions with ColgatePalmolive. As a result, some college graduates applied for jobs that only required high school as a qualication. Poor infrastructure in Sri City was yet another issue. Because of the poor road conditions, employees from Chennai could take almost two hours each way to get to work. They could also find that mobile phone charges increased substantially after crossing the state border from Tamil Nadu into Andhra Pradesh to work at the plant. Some companies chose to either pay a hardship allowance or provide residential facilities for employees who travelled from Chennai to work at the plant. Attracting workers from other toothbrush factories could also prove difcult. These employees normally worked at small or medium-sized enterprises, which were largely family owned or family managed companies that relied on community networks. These employees had strong, longterm relationships with their employers, which often extended beyond the workplace. Getting people to leave such organizations after many years of service would be a challenge. As Singh pored over the resumes of the five candidates (see Exhibit 2), he realized that determining the appropriate pay scale for these candidates involved dening an appropriate pay philosophy and strategy for the organization to attract, motivate, and retain the right talent at the Sri City plant. That strategy would have to be consistent with the existing culture at Col gatePalmolive. Before determining the actual pay rate, he had to match the candidates with the appropriate positions and qualify each position, which required various questions to be resolved: How important was each job to the organization? How would importance be best determined? What was the market rate for these positions? Singh referred to the company's organizational chart (see Exhibit 3} and the relevant job descriptions for various jobs in the plant (see Exhibit 4). He also had obtained some external market data that was based on a worker level mapping model created for Colgate-Palmolive.S The framework included a position code for each operation function and the compensation benchmarking report for the current year (see accompanying Student Spreadsheet, product TBZOC026). How would this information help Singh determine a pay structure that was internally aligned while externally competitive? He set off to work on the resumes on his desk. EXHIBIT 1: COLGATE PALMOLIVE INDIA LIMITED PROFIT AND LOSS STATEMENT (IN