ZTE India will fully restore the salaries of senior executives whose pay packets were initially cut by some 20 percent, in order to boost flagging staff morale and retain key personnel.
The decision comes just weeks after the company lost three senior executives from its services division amid growing disenchantment over internal human resource (HR) policies, the Economic Times reported Monday, citing unnamed senior company officials.
The pay cuts were initially intended to last for at least five months when it first took effect last October. This was done to reduce costs amid declining sales revenue, according to the report. Senior Indian managers drawing over INR 150,000 (US$2,743) monthly took a 20 percent hit on their pay packages, while expat Chinese executives suffered a hit of between 12 percent and 20 percent, it added.
ZTE India did not reply specifically whether the decision to end salary cuts midway was meant to retain top talent, the Economic Times said. However, the unnamed sources said the management team seem to realize it would be difficult to do business in India if senior managers who were unhappy with the pay cut started leaving in droves.
"Tackling manpower shortage may not be a huge challenge for ZTE as it can always bring engineers from China, but it still requires senior Indian executives to manage project delivery and vital customer relationships with [telcos such as] BSNL, Airtel, Tata Teleservices, and Reliance Communications," said one source.
Another said: "ZTE India cannot afford to lose senior managers at this point as it needs them to execute the mega BSNL contract on schedule". He noted the BSNL deal was crucial for the Chinese company, which had clinched the contract to supply 2G network equipment for over 10 million GSM lines in northern and southern Indian states.
According to the Economic Times, BSNL has also placed advance purchase orders with ZTE India for additional GSM equipment for another 5 million lines in eastern states.
The report also pointed out the decision to restore pay cuts comes ahead of leadership restructuring of its Indian office. Current ZTE India CEO Cui Liangjun will return to the company's Shenzhen headquarters, while services head, Xu Dejun, is slated to become the new CEO for the country's operations, it noted.