From India, Bangalore
If company / unit has not performed well against the pre-decided goals then a common circular in this regard is good enough to notify the non payment of performance incentive.
In case of individual it need to be justified based on facts and figures that why under the circumstances the same is not payable.
Every action need to be justified to extent that it should not be construed as malafide intention by any any individual.
Regards
From India, Chandigarh