Compensation Management Assignment

On

ORANGE S.A.

Compensation Practices
Group 7

Submitted to:- Made By-

Prof. K.J. Srinivasan Saagrika Bali 19PGDMHR41
Sagar Kashyap 19PGDMHR45
Tanvi Garg 19PGDMHR56
Savani Tandon 19PGDMHR47
Aarushi Makhija 19PGDMHR01
Rajiv Ghosh 19PGDMHR37
 Table of Contents
Sl. No. Topic Page
No.
1. Introduction – ORANGE S.A.
2. Strength and Weakness of the Company- SWOT Analysis
3. Company Discipline and Benchmarking
4. Compensation Policies
5. Compensation & Benefit Practices
6. Comparator Basket
 ORANGE – A BRIEF INTRODUCTION
Orange S.A., earlier named France Telecom S.A., is a French MNC. It has 266 million
customers worldwide and employs 89,000 people in France, and 59,000 elsewhere. It is
the tenth largest mobile network operator in the world and the fourth largest in Europe
after Vodafone, Telefónica and VEON. The company's head office is located in the 15th
arrondissement of Paris. The current CEO is Stéphane Richard.
Its operations can be divided into 4 main categories – mobile, landline and internet,
broadcasting, and music.
MOBILE – Orange is the sole brand used in the marketing of the company's mobile offers;
the Itineris, Ola and Mobicarte brands have been combined since 2001, and Mobicarte
became a special prepaid calling offer. As of 31 December 2010, Orange has 150 million
mobile customers worldwide, 17.9% of whom are in France.
LANDLINE AND INTERNET – Orange took over the landline and Internet businesses of
France Telecom and Wanadoo in 2006. Since then, Orange is the sole brand of France
Telecom for landline and Internet services worldwide, with a few exceptions, such
as Mobistar in Belgium and TPSA in Poland. Orange's triple-play broadband Internet offers
are supplied through the Livebox. As of 31 December 2010, Orange has 13.7 million
broadband ADSL customers worldwide, 67% of whom are in France.
BROADCASTING – Beginning in 2003, Orange's strategy has centred on the acquisition,
creation and diffusion of content. This started with the creation of MaLigne.tv in 2003, later
renamed Orange TV, an ADSL television access service and a video on demand service. In
2004, Orange organised a television access service for mobile phones. In 2007, Orange
created Studio 37 and, in 2008, it entered into a partnership with France Televisions to
broadcast pre-recorded programming from the public national television and to roll out theme
channels for sports, cinema and television series. Dubbed as ‘Content Everywhere’ in 2008,
the content access strategy was announced simultaneously with the launch of the Orange
cinema series television channels. It aimed at offering customers access to all of the
company's content, anywhere and from any device.
MUSIC – ‘Liveradio’ was created by Orange in 2008. It is a free, live, on-demand IP radio
streaming service. Users gain access through this service to more than 10,000 FM and web
radio stations and 11,000 podcasts from 100 different countries.
 Orange S.A.: SWOT Analysis
SWOT analysis
It is the preferred tool to understand the strategic and competitive positioning of the firm. It
uses the SWOT- Strength, Weakness, Opportunities and Threats analysis as a major tool and
it is also recognized across all departments which gives them a basic platform to work
together to solve various issues. The SWOT analysis of Orange SA is given below in the
SWOT Matrix.

Strength
 Strong distribution chains are present to provide ease of accessibility and timely
product delivery to its customers.
 Dealer community – strong relationship with their dealers who encourage customers
to try their products at their credibility thus becoming the companies’ promoters.
 Orange has a strong social media presence with more than a million followers on
Facebook Twitter and Instagram.
 Orange has a large product portfolio and provides its customers with a large range of
products which is highly beneficial for a technologically innovative company because
of improved performance through product compatibility.
 It has a high brand awareness as it has been in the market for years. People are highly
aware of the brand.
 Cost effectiveness- The product prices of Orange is relatively low as compared to its
competitors.
 Orange has a vast numbers of intellectual property rights which includes numerous
trademarks and patents. This helps in maintaining their core competitiveness through
product differentiation.
 Orange S.A. has a large asset base which supports it in getting easy financial support
through loans and bonds as it is easy collateral which is highly liquid.
 The products are known for the quality of the products which creates credibility in the
minds of the customers.

Weakness
 Higher than average Inventory cycle- the inventory takes more than average time
taken by its competitors to be sold.
 High proportion of the property used by the Orange is rented which creates large costs
as rents.
 Incompatible structure for vertical integration which has been seen in various filed
mergers in the past.
 Orange has low preference in including its strategic decision on the concept of market
research.
  A weaker legal department and lack of experience among employees in the given
department.
 The task per worker is high which results in high stress for the workers.
 Decision making is highly centralized and the decision making of the team needs to
be approved by certain officials which is counter productive for a company which
follows growth and innovative culture.
 Lack of systematic performance appraisal which creates dissatisfaction among the
employees.

Opportunities
 Increasing internet users give way to reach larger consumer base.
 The increase in the usage of the E-commerce leads to the opening of the opportunities
for Orange SA to expand its industry online.
 Beneficial tax policies provide great opportunities for the company to expand its
market.
 With the increased implementation of AI and other technical options, the company
can greatly benefit.
 Government has provided various policy to support the sales of environment friendly
products and this can greatly benefit various projects that Orange SA is working on.

Threats
 New entrants have increased in the industry over the years which has created high
distribution of the market over the years.
 Increased competition has resulted in competition on price level which has resulted in
high decrement in the profit margins.
 Consumer retention is difficult as their tastes change quite frequently.
 With ever fluctuating exchange rate, the company has to suffer from high uncertainty
in terms of the ROI on their products.
 With new technology being launched in the market every few days, the workforce
L&D projects create high costs for them.
 COMPANY DISCIPLINE AND BENCHMARKING
Customer Intimacy
Orange provides a wide range of services-
• Business Consulting
• Digital Transformation
• Multisource Service Integration
• Exploration of latest trends and sharing enterprise Best Practices

Benchmarking Strategy
• The market survey is outsourced to a company that capitalizes on the data
• A report of the median salary offered in the market for a specific skillset is made.
• Salary structure is based on that report.

COMPENSATION POLICIES
 
CASH COMPENSATION
• Range between 90% - 110% of the median market salary depending on the
availability of the specific skillset in the market
• 5 bands of employees, although compensation is based more on the
availability of the skillset in the market as well as the market demand
• In rare cases, the pay extends to about 130% of the market median
• Currently, they attribute 90% to fixed pay and 10% to variable pay. Although,
this is not the same for functions like sales in which case the salary structured is
up to 40% invariable pay
•  Promotions not entirely based on number of years of work experience
Employee satisfies all the competencies required for the next band gets promote

BENIFITS
• Employees already earning 130% of the market median do not get many extra
benefits for their excellent performance
• Employees earning below the market median get compensated for the extra work
depending on different component weightages for the final compensation as and
when they put in extra work.
• Compensation is paid up till a certain level so as to differentiate average performing
workers from the constant top performers
• Weightages for different components of work performance are mostly complex.
• Generic weightage assigned to an average performer is a rating of 2.5

Generic Benefits
• Health facilities, accidental insurance coverage for each band of employee.
• Don’t cover accidental coverage for the family members
• Maternity benefits are provided in accordance with the maternity benefit act of 1961.
• Paternity benefits of five days provided

Subjective Benefits
• depends on the Job role, example a sales guy who needs to go door to door do
extensive traveling gets an automobile facility
Compensation and Benefits Practices of the Organization:
The organization practices a very well evaluated compensation strategy. The strategy can be
summarized in three main phases.
1. Using Market research companies to collate data about market wage practices:
These companies give the stats for median salary and average salary provided in the
market by the other organizations for jobs mapping similar competencies. These data
are important as they give an insight about new market practices and can be used as a
competitive advantage.

2. Allotting weightage to competencies as per availability in the market:

There is different skill set and competencies required for different job roles. Some of
these skill sets are easily available and some are hard found. The organization offers
greater monetary weightage to roles requiring rare skill sets as compared to those
easily available ones. This is done to lure these employees for longer stay in the
organization.

3. Designing final salary structure using grading system:

The salary structure majorly follows the competency-based pay except sales
department. The fixed salary is determined by competencies required for a job with
their normalized ratings.
For example:
Skill set required for job is A B and C
A- 4
B- 5
C- 2.5

Multiplying factor = 10000

Therefore, pay scale = (4 + 5 + 2.5) * 10000 + Market median = 1,15,000 + Market

median
Following this strategy, the company’s compare ratio falls between 90% to 130 % of
market median.

Orange Business Services is known as a well payer and pays its employees an average of
₹597,319 a year. Salaries range from an average of ₹254,280 to ₹1,523,998 a year.

Analysing Pay practices:

The compensation practices are more diverse and different at topmost level. Since 2011, the
fixed compensation of CEO delegates amounted to 600,000 euros. But in 2016, a new system
was introduced wherein for Corporate Officers structure of the annual variable compensation
was based on the weighted average of four indicators i.e. group’s growth, profitability,
customer experience and CSR performance. This system was again modified in 2018.
For employee level compensation practices the organization has adopted lead strategy as
they adopt only those strategies which have successfully been tested in the market.
But the annual financial growth structure has been a debated side of the organization with
growth rates sometimes lower than the inflation rate. Also pay rates for overtimes are a
demeaning feature of the organization.
 Comparator Basket

Orange S.A. Tata Reliance AT&T BT Group

Communication Jio
s Infocom
m Ltd.

No. of 2,000 8,500 15,000- 2,51,840 106,700

employe 20,000
e

Revenue  4,138.1 Cr 17,095 Cr INR 11,679 Cr 17,075 Cr 23.428 Bn

EUR INR USD Pounds

Product Mobiles, Network & Mobile Satellite Fixed-line,

s& landline, connectivity, broadband television, mobile
Services Internet, Cloud services, , JioFiber, Internet telephony,
broadcasting, media services devices, services, broadband,
music Wi-Fi broadband fiber-optic,
, OTT, home
film security, IT
production and network
, services,
publishing digital
, news television
agency

Benefits 5 days Transportation - Maternity Paid time- Volunteerin

paternity car lease, medi- benefits - off, 2-5 g leaves,
leave, health claim, 1-week half day weeks’ share plans,
insurance, paternity leave after vacation tech.
accident resuming leave, Discounts,
coverage, work, tuition optional
travel & sporting assistance, benefits
accommodatio facilities employee (healthcare
n facility (role discounts, facilities,
specific) health gym
insurance, membership
401(K) )
plans

THANK YOU