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Anuraadhaa
22

Dear Folks
We are Japanese based company working in IT field, keep in view of the current market conditions, our Mgt has decided to implement Variable salary structure across the Org.
Can you please send the salary structure with Variable pay along with % of VP given to each level of employees.
Thanks in advance
Regards
Anuradha

From India, Pune
haimanti25
hello everyone...i found this is a very interesting and helpful site for hr ppl...i have a experience in administrative n ppl management field...right now m doing my SAP in Hr module...so i dnt knw exactlly Hr trms n policies...so plz send me some important areas which should i cover in btw my course...
thanx...:p

From India, Hyderabad
Abhiman

You can chose variable allowance suitable for the CTC, first break up the statutory components like basic(either 50% on gross or 35% on CTC) then HRA(40% on basic) Conveyance( max 800 per month), later divide the rest in to variable allowance like medical allowance(max 15k per annum), LTA, telephone , special allowance, other /flexible allowance, performance allowance,....

the advice is to keep minimum suitable components which should also allow employees have benefit.

Hope this gives you some information..if you have any clarification..pl.post, will try to reply for it.

Regards,
Anu

From India, Bangalore
nrpavan
2

Dear Anuradha,
When we divide salary into Fixed component and variable component, only fixed component will have break up and variable component will be paid to the employees at the end of the year based on their performance. If the total package offered is 6 Lakhs per annum and it is divided in 70 - 30 basis, fixed component will be 4,20,000 and variable component will be 1,80,000/-, in this only fixed component will have break up(4,20,000/- should have break up as per norms) and remaining 1,80,000 will be paid at the end of the year based on the respective employee's performance.
The division of total package in to variable and fixed components will be decided by companies based on the requirement. Make sure that this break up is communicated to employees in writing with their acknowledgment.
Hope i cleared your confusion

From India, Hyderabad
Anuraadhaa
22

Hi Abhiman and Nrpavan
Thanks a ton ! :p
Like Pavan mentioned, we are looking for Variable pay linked with Individual performance incentive and Company performance incentive..
Can we have both the variables in the salary structure and what should be
the % of Individual performance incentive and Company performance incentive ?
I understand that Company performance incentive is based on Org profits at the end of the year.. but what is the usual % in salary.. 10% 20% as per IT industry norms
and how much is the individual performance % usually in salary as per the industry..
Are there any legal limitation of giving a employee incentive based CTC ?
Regards
Anuradha

From India, Pune
rashmi2b@gmail.com
3

Hello Sir,
I am Rashmi from mumbai..need ur help..
is this sttement right:
HRA: will be usually 50% on Basic/DA. This component can be changed as per the Management decision
Does HRA can be more than 50% in any cases.
Kindly help me on same on

From India, Mumbai
pari.nerurkar
19

Dear Anuradha,

We are not a IT industry but recently in Aug, 08 we have restructured our salary, basis study report of renowned MNC HR consultant. See if this helps. First decide CTC of each employee. Then factor it :
1. Basic
Basic 25% of CTC

2. Housing
HRA 50% of Basic (Ref IT - to permit max benefit)

3. Cash Emoluments
CCA 50% of Basic
Conveyance 800/- p.m. (Ref IT - 9600/- p.m. exempted)
Medical (Gradewise 15000/- to 22000/- - Ref IT 15000/- reimb)
LTA One month 'Total Fixed Pay' once in Block of two years
Food Coupens (Gradewise Rs.2000/- p.m. to Rs.4000/- p.m.)

4. Total Cash = 1 + 3 (BAsic + Cash Emoluments)

5. Variable Pay (Special Allownce) = Balancing Figure wrt TFP (CTC - Retirals) (8-7)

6. Fixed Pay = Total Cash + HRA + Variable Pay (2+4+5)

7. Retirals (Employer Contribution)
a. Provident Fund (@ 12% of basic)
b. Gratuity (@ 4.83% of basic) factor only if extending the benefit and depositing with respective authorities

8. Total Fixed Pay (CTC) = Fixed Pay + Retirals (6 + 7a + 7b)

So decide CTC
Calculate Basic
Calculate Retirals
Arrive at Fixed Pay (CTC - Retirals)
Calculate remaining components
Arrive at Variable pay (Balancing figure i.e. TFP - Basic - Housing - Cash Emoluments)
Fit in Excell and will be easy to understand

Regards

Pari

From India, Mumbai
sakshimoza
1

Hi Anuradha
What percentage of Fixed CTC you want to pay as variable pay depends upon Company Compensation philosophy.Ideally at the lower levels where the employee is only an individual contributor, there dosen't need to be any variable pay and you can add this amount to his fixed CTC so that he gets more cash in hand , where as at the middle and senior management level you can start from 10% to 20 % of their fixed CTC as their variable pay and link it to company achieving its target . That means an employee will get variable pay only if the company achieve its target and then you keep weightages for their individual performance also .Like 100% amount of variable pay for employees who get rating 1, 80% for Rating 2 , 50% for rating 3 and 0% for non performing employees.
Hope this will help .
Thanks
Sakshi

From India, New Delhi
rashmi2b@gmail.com
3

Sorry m new to this citehr,have used wronmg thread..My appologies for same..Can any1 help me with my above query..Also plz help me how sud i post my questn in a new thread..plz mail me on ..
From India, Mumbai
Sajid Ahmad Khan
This one is a good calculator and will be really helpful for the HR practioner who are new and need to work on salary structuring and most importantly it is very easy to understand. Thanks Sajid
From Bangladesh
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