Dear All,
I am working with an IT company, where in CTC comprises of Fixed Salary and Variable Salary (30% of CTC). Company assured to pay the variable salary at the end of every year based on Individual appraisal rating and Company performance.
Due to recession, they deferred the payment. This year also they did not pay the variable component and now, they have announced that variable pay is abolished. This brings down our CTC by 30% flat.
Is there any law by which employees can get this variable as part of the fixed salary ? Because I feel company has cheated on its employees by abolishing the variable pay.
Need your guidance at the earliest.

From India, Pune
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Dear Sunny,
As per my understanding, the variable pay will not be part of CTC. if they have defined the same in the CTC, along with the quote "based on the performance", you cannot do anything. your employer is at the safer side.

From India, Bangalore

Any Company will have its ups and downs. There will be times when the Company is not able to fulfill its commitments. However, a good Company is one that communicates effectively the reasons for falling in commitments. As a HR Manager, you could advise your management the need to communicate effectively why it has failed to meet its commitment and how it is going to meet that commitment in future. This will retain the trust and credibility of the Company among the employees.
From India, Chandigarh
Dear Sundar,
Thanks for the response. Variable pay is mentioned as part of CTC. Now if the company abolishes the variable pay, this will result in CTC being 30% less. This will definitely affect all of us while exploring opportunities outside this company.
Isn't there anything which can be done by the employees to atleast retain the CTC on paper ???
Kindly advice

From India, Pune
I worked for a registered mining company(PBS & son)more than two and half year(15.11.2007 to25.01.2010).But they terminated(25.01.2010) me without reason as per their appointment letter with payment of one month with immediate final settlement has given to me and gift amount 34 percent paid for the year 2009-2010 to all employees,not to me(10 percent paid).
what can i do to get full gift amount,final setrtlement and employment?

From India, Bellary

The CTC is just an indication of what the employee might expect to receive in terms of cash remuneration, benefits and insurances.
It is wrong to expect a "variable" component of your salary to be paid to you or to be part of the legal salary required to be paid. There is a reason they call it "variable", it cannot be predicted and it is not regular.
It is now your choice to stay with the company and accept the changes, hoping for an improvement when their budgets increase or to look for another job. At least if you go elsewhere, you will be smarter and not just expect variable pay to stay the same.

From United Kingdom, London

Regarding Variable Pay , I have one more dimension. Start up companies will also mention part of CTC( 20-30%) as variable pay . Being start up company , Variable pay cannot be determined based on business performance . Then the only basis on which employer can give variable pay is KRA based individual performance .
Here also the employer is at liberty to pay whatever he deems fit as Variable pay . Otherwise our colleague has rightly mentioned , it has to be done as matter of undertaking signed off between the two parties .
Dr K.Sureshkumar

From India, Mumbai
Thanks for the all the responses... Seems like no scope of improvement for the employees :-)
I am not disputing company paying the Variable Component. Even if its not paid, it is a part of CTC which helps employees in negotiating in next companies.
Issue is when company abolishes variable component, the revised letter contains only fixed salary, which is now actual CTC minus variable component of 30%. Next job search, will now be based on this reduced salary !!!!
Is there any way we can stop the company from abolishing the variable pay ? let there is not disbursement of variable component.. but it SHOULD not be removed from the CTC.

From India, Pune
Good companies will always have a well laid down policy on variable pay and all employees will know whether they are eligible or not based on the policy. Hence, if one is offered variable pay as part of CTC, he should take care to ask for company policy on variable pay before accepting the offer
From India, Mumbai
Dear Sir,
Is there any particular salary structure that every company should follow the same and it is as per law. Because different companies following different salary structures. My concern is some companies showing the less basic in the employee salaries to minimise burden in cost to company. Is it acceptable? Can we challenge as per law? Please suggest.

From India, Hyderabad

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