Hi,
In my company, the marketing guy has not been able to achieve the target for the last two months. Management has decided to withhold 30% of his monthly salary, which will be given to him once he achieves the target. I would like to know under which component in the salary slip his withheld salary should be shown.
Regards,
Shanu
From India, New Delhi
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2In my company, the marketing guy has not been able to achieve the target for the last two months. Management has decided to withhold 30% of his monthly salary, which will be given to him once he achieves the target. I would like to know under which component in the salary slip his withheld salary should be shown.
Regards,
Shanu
From India, New Delhi
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Shanu ji, You can show the 30% deduction under other / miscellaneous head (with a narration stating the facts) or under Performance linked incentives, if any. Hope it will useful Regards Krishna
From India, Hyderabad
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From India, Hyderabad
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You cannot deduct any fixed component for non-performance unless otherwise provided in the appointment order. Such a component, usually called the variable pay (which will vary depending upon the performance or achieving targets), should be there in the salary structure. In the absence of such a component of the salary, you are not expected to deduct any portion of the salary for not achieving the targets.
Madhu.T.K
From India, Kannur
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Madhu.T.K
From India, Kannur
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I completely agree with Madhu T. K.
You are running a huge risk by attempting to do this if it is not mentioned in the appointment order. Your employer brand value as a company to work for gets hit because the good performers will not really be interested in working for you. Your cost of acquisition as well as the cost of vacant positions will increase because of the extra time required to fill your vacancies. You may be required to compromise on manpower quality now to fill vacancies. In which case, you will be back where you started vis-a-vis the achievement of performance goals. A costly process, right?
Additionally, do you think it's fair that the employee is being penalized in this method, but his managers are not? Since the manager's role is to support his team, he should also share in the deduction of such monies, and so on, this chain should go right to the top management. In this way, the organization will be seen as taking collective responsibility.
If anyone wishes to debate further, one can also say that inputs/support were provided, yet the employee did not deliver. I would state that the manager is still at fault because he and his seniors were a part of the hiring process. So again, it is collective responsibility.
Just my thoughts.
Regards,
From India, Mumbai
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You are running a huge risk by attempting to do this if it is not mentioned in the appointment order. Your employer brand value as a company to work for gets hit because the good performers will not really be interested in working for you. Your cost of acquisition as well as the cost of vacant positions will increase because of the extra time required to fill your vacancies. You may be required to compromise on manpower quality now to fill vacancies. In which case, you will be back where you started vis-a-vis the achievement of performance goals. A costly process, right?
Additionally, do you think it's fair that the employee is being penalized in this method, but his managers are not? Since the manager's role is to support his team, he should also share in the deduction of such monies, and so on, this chain should go right to the top management. In this way, the organization will be seen as taking collective responsibility.
If anyone wishes to debate further, one can also say that inputs/support were provided, yet the employee did not deliver. I would state that the manager is still at fault because he and his seniors were a part of the hiring process. So again, it is collective responsibility.
Just my thoughts.
Regards,
From India, Mumbai
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Dear Friend,
The 30% salary deduction from your marketing employee could not be withheld by management on the grounds of his failure to reach targets. If you had linked his salary with performance at the time of selection, it could have been justified. Otherwise, this act of making deductions amounts to illegal deduction as per the provisions of the Payment of Wages Act and makes the company liable for penal action and penalties.
Instead of taking that approach, it is advisable to counsel the employee either orally or in writing, asking him to improve his job performance. Otherwise, you may need to take action against him under the standing orders/service rules of the company and follow the procedure based on the principles of natural justice for imposing punishment, such as stopping increments, suspension, or termination, depending on the findings of the inquiry officer. It is important not to immediately resort to punishing him by withholding his 30% salary, as that would be seen as victimization on your part.
Regards,
From India, Hyderabad
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The 30% salary deduction from your marketing employee could not be withheld by management on the grounds of his failure to reach targets. If you had linked his salary with performance at the time of selection, it could have been justified. Otherwise, this act of making deductions amounts to illegal deduction as per the provisions of the Payment of Wages Act and makes the company liable for penal action and penalties.
Instead of taking that approach, it is advisable to counsel the employee either orally or in writing, asking him to improve his job performance. Otherwise, you may need to take action against him under the standing orders/service rules of the company and follow the procedure based on the principles of natural justice for imposing punishment, such as stopping increments, suspension, or termination, depending on the findings of the inquiry officer. It is important not to immediately resort to punishing him by withholding his 30% salary, as that would be seen as victimization on your part.
Regards,
From India, Hyderabad
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