For the case study below, what are the key business challenges for Colgate-Palmolive at the Sri City plant? What human resources responses can help Colgate-Palmolive best deal with business challenges? What compensation philosophy and specific compensation strategies would you recommend for the Sri City plant?

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 to 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.