Hi everybody: I am working with a Healthcare KPO. The salary structure consists of two parts....fixed (fully documented and structured) and variable (incentives and deductions). While the incentives guidelines and parameters have been clearly laid out in the appointment letter, there is complete silence about deductions in the appointment letters...this is only conveyed to new joiners, orally.
While the salary slip consists of everything, it contains only one heading as "Performance Incentive". Wherever deductions are involved, it is not shown explicitly, rather it is deducted from the incentive and shown as "performance incentive"
My question is: Is this going to hold in the court of labor law in India? Can this be considered as unlawful deduction? Please advise.
13th March 2011 From India, Pune
This cannot be a law forcement
if your employer is deducting from your normal package then you can go to law
if you are enjoyinng the incentive in positive you should also take into experience the -ve
if you are getting deducted, analyse and try to improve
the slab for incentive is kept only for generating good works and if it is not been found good you have to accept and try to improve
13th March 2011 From India, Madras
Can you please be more clear. If the incentive amount is in negative than maybe you can take the company in the labour court. If the total incentive amount is in positive, than you cannot take the company to labour court. i.e. the total salary cannot be less than the fixed components [less standard deductions such as PF, ESIC etc]
14th March 2011 From India, Ahmadabad
Dear Mr. John:
Whereas the company boasts of total transparency, it is shameful that the company must say this ..."everything cannot be given in black and white....or else the employees may misuse it"
What the company in fact is doing, is that it is making fun of the faith that employees have on the company. Even the most sincerest of employees would in long run tend to have negative thoughts and sense of demotivation.
SKP
15th March 2011 From India, Pune
Dear Mr. Mirza:
Well, I must really be more clear. The incentive does not go totally negative. Of course the fixed part remains intact. The calculation is thus:
Total salary=Fixed components[less standard deductions such as PF, ESIC etc] + Performance Incentive.
But the computation of Performance Incentive is not documented. It is revealed to the employees only in an oral way, and the calculation is thus:
Performance Incentive= Incentive earned -(minus) deductions.
The resultant Performance Incentive is then added to the payslip.
Thanks
SKP
15th March 2011 From India, Pune
Dear SKP,
As the performance incentive remains nil or in positive than there is no legal recourse for the same. As far as the transparency in incentive paid is concerned, that is the decision of the company.
But it is surprising as the incentive is normally paid to ensure higher productivity. If the incentive policy and calculation is not transparent than the entire purpose of having incentive is defeated. At the same time it is not possible to give the complete details in the salary slip as the number of headings in salary slip would be limited.
In our organisation, we have a separate incentive slip which shows the total productivity of the employee and the calculation of incentive for the given period [we give incentives on quarterly basis]. The final total of these incentive slip is than added to the salary slip under performance bonus heading.
Transparency in incentive calculation and payment is essential if the organisation wants to ensure that productivity of employees keeps on improving.
16th March 2011 From India, Ahmadabad
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