Labour Law & Hr Consultant
Learning & Teaching Fellow (retired)
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Thread Started by #Aishwarya Manjunath

Hello everyone,
Is it correct on the employers part if we can reduce the employees salary by certain amount when he is lacking in performance? Warnings are not given till date but in a couple of discussions we have informed that his results are low even though he's been putting a lot of effort. He works over time, works really hard but his results are low and not up to the standards we are expecting. We have been pushing him all this while, but we can no longer afford to do so (It's been 6 months of his service with 3 months of probation). We are looking to hire a more experienced person who can assist him and guide him if he wants to learn and continue with us because we do not want to terminate him.
Do you think reducing his salary will be a good option or anything else we can do? Suggestions please?
8th November 2017 From India, Bengaluru
Dear Aishwarya,
Generally, performance of the assigned work/job within the time-frame has two facets - one quantity and the other quality. In both the cases, it can be evaluated by means of a systematic performance appraisal only. Particularly, when the nature of the work has got more quality orientation, the appraisal system should be such that subjective considerations or inferences are minimized to the possible extent by setting clear-cut parameters of assessment. When the performance of the work can better be assessed quantitatively, the appraisal becomes relatively easier and more exact giving no room for any subjective considerations. Consistent poor/low performance of an individual employee has a devastating impact not only on his career but also on the effectiveness of the team concerned. Of course, when the particular employee's performance is continuously on the ebb, the Management can resort to proportionate wage-cut. But reduction in his salary is a punitive action which requires the compliance of the principles of Natural Justice before inflicting such a punishment.
8th November 2017 From India, Salem
Umakanthan Sir, thank you very much for your response. Also, if you can let me know in brief how to come up with a clear cut quality based assessment for evaluating his appraisal, would be great.
I have prepared one appraisal form that brings out the core responsibilities of the employee, work demands, his objectives, performance areas, result areas that come in self appraisal and supervisor's appraisal, is that good enough? is it going to be like you mentioned?
9th November 2017 From India, Bengaluru
Adding on to the previous message sir, performance appraisals are done after the employee completes an year isn't it? The employee has only finished 6 months. But we know its not happening. How much ever we push he's not able to come up to our expectations. And we cannot afford to keep paying him for the work hes been doing and wait until its appraisal time. We need to decide something in a month or two. We have been losing projects because he's not very skilled yet to handle them. And we cannot afford for an experienced one and still retain this employee. We dont want to fire him and be that harsh. That's why we thought of reducing his salary and accommodate two.
Whats your opinion sir?
9th November 2017 From India, Bengaluru
Dear Aishwarya,
Umakanthan has given you some advice based on the limited information that you have provided about the scenario. You need to give more information to give you a concrete advice. What is the nature of the person's work. Has (s)he any previous experience in doing similar work? if not, have you provided any training? You say that (s)he doe not meet your expectations. Are your expectations too high? What methods have you used to set his/her targets. In some companies, the targets are set very high.
The more information you provide the better the advice that you will get.
9th November 2017 From United Kingdom
Hi sir, surely I shall answer to these questions. He's working as a web designer and developer. He had 2.5 years of experience when he joined and now its 3 years. He was working in the same post earlier too. He was working on a client project few months ago but we lost the project coz he cldnt meet client expectations. Now he is working on our company's website only. Hes now being spoon fed. He lacks creativity and he's very dependent. Until you tell him to do this he wouldnt do it in his knowledge. We have to monitor every move of him. Quality is affected if you let him do things by his own. He lacked in designing skills for our website even after repeatedly telling him how it should be. So the MD started developing the web design himself to help him and he should only develop it. Now he lacks in developing too. He takes a lot of time and even the smallest tasks are left undone until we monitor it. Example, even to erase a line we have to tell him or else he wont do it.
I tried talking to him and understand where hes lacking support or knowledge and also told him to gain additional knowledge on the areas where he's weak in. His reviews were low, and in many other discussions we have told him that we cannot carry on with this pace. In fact, we are losing time attending to him every min.
When asked, he says its challenging for him but he knows how to do but it takes time. Little time is fine. Its already been months now. If this is d process he wants to continue with client projects as well we cannot go ahead.
We are giving him tasks where he's knowledgeable at, but still he's not able to cope with it. We cannot spoon feed anymore. Thats why we arrived at this situation. I felt cutting down on wages is worse than firing a person. But we really do not want to fire him, instead cut down salary, bring in higher experienced person, put him under his/her training and lift him up, if he's going to agree to this.
What do you think, Sir?
9th November 2017 From India, Bengaluru
As the website is users interest. An employee will only do the changes only if the higher authority suggests or orders. These days with no approval if you do on your interest is a fishy thing.
If he was that much with no proper knowledge, then catch the person who has hired him or check the remarks that was written on his CV when he has joined the organisation.
Don't just judge an employee with no proper things in the company. Employee also cant request or order anything to the company with no performance.
9th November 2017 From India, Hyderabad
Dear Ashiwarya,
Look at the other side of the coin too, when weighing and executing the above suggestions. Why an experienced candidate with similar job knowledge of 2.5yrs is not performing at your work place.
1. Check the work environment dynamics... starting from infrastructure provide( seating arrangements), tools for his productivity ( system, software, internet ) and most important his colleagues, his peers, his reporting line, his instructor, is something bothering or obstructing his performance.
2. As a HR you cannot micromanage each and every employee in the company. Engage buddy system when a new person joins the company, who will constantly guide and guard him and help in his initialisation, basically orientation int the company. This buddy would inturn give feedback HR the initial journey of his for a fixed time period.
3. If you want to give the employee another chance, as HR you could do some employee engagement, speak to him and probe if his personal/family/friend areas is diverting his attention and which can be resolved external.
By way of reducing salary, you creating additional emotional burden for the employee. Its good to rather give him 3 warning and terminate, he can fend for another job with equivalent remuneration.
10th November 2017 From India, Mumbai
Thanks a lot for your suggestion mam. I will surely look into the aspects :)
Lastly, thank you all for responding to my query.
10th November 2017 From India, Bengaluru
Greetings ......
I have gone through the thread very carefully and thought putting up the following lines for you to note please ...
1) Let me first understand your process of selection and HR observation of the employee. He must have been selected through a process of interview. Had he been tested on his capacity of imagination and creativity? Or, had he atleast been communicated the Employer's expectation of his capacity of imagination and creativity?
2) Had he been projected on "Career Graph" offered be the employer and incresing expectation (job requirement) on imagination and creativity of the employer on with every hop and step on the "Career Graph"? I feel this had been an essential part of the interview process and if not done so you were sure to have this set back.
3) What I got that the concerned employee is a web designer and developer. If I am not wrong, looking at fast changing world of IT, upgradation of knowledge is a must for such employees and the employer has to facilitate the process - Do your organisation has such system?
4) Do you (the employer) feel that placing the employee on the right career path and educating him with essentials of employment and also guiding the employee on the track is employer's responsibilities as well?
5) Do you feel that it is not a prudent practice to lure (tempting) an employee already working in another organisatin without matching him to Job Requirement is a healthy practice?
I am sorry Aishwarya, any arbitrator would say that "reducing the employee's salary" on the plea of "non-performance" is not justified if your answer to aforesaid question do not uphold good intention.
Soumitra Sengupta
11th November 2017 From India, Pune
Performance = Ability x Motivation
Ability is the person's aptitude, as well as the training and resources supplied by the concern he is employed.
Motivation is the product of desire and commitment to perform in the given work.
Someone with 100 percent motivation and 75 performance ability can often achieve above-average performance. But a worker with only 30 percent ability won't be able to achieve the type of performance you expect, regardless of his or her level of motivation.
Poor permanence can be
Lack of knowledge in the given work
Motivation to do the given task
Sluggish, lethargic attitude towards work.
Diagnosing Poor Performance
Very difficult tasks.
Low individual aptitude, skill, and knowledge.
Evidence of strong effort, despite poor performance.
Lack of improvement over time.
Recharging the Ability in a candidate
Resupply of the best resources to finish a given task
Before going down that route, however, try the strategies discussed here and create a great work environment for your employees one where their abilities are used to their full potential, and where good motivational techniques are used on a regular basis.
From there, it's important that you and the employee discuss and agree upon a plan for improving performance. Write down what you've agreed, along with dates by which goals should be achieved. Then monitor progress with the team member, and use the techniques we've discussed above for increasing motivation and dealing with ability-related issues.
11th November 2017 From India, Bangalore
Dear AM:
We need to look to both the sides of the coin, before taking the punitive action of pay reduction( Please also take into account the statutes and the relevant bye-laws).
The performance appraisal , by definition comes after one year, and whatever the reasons are for the staff's low output / performance, has he been provided the necessary facilities for skill building and development, to match the needs of the job, at the company's 'satisfactory' level. All such 'measurements' are too vague. Also remember all learners and task performers are not equally proficient - and though performance appraisal has become a very definite science, yet it is relative and often given to a lot of subjectivity ..
The onus at this point lies on the management to help train the employee with skills development, within a given time frame, and then think of upgrading or firing the employee.
Arif ur Rehman
13th November 2017 From Pakistan, Karachi
Dear Soumitra,
Here are the answer for your questions:
1. Process of recruitment was followed but checking on his capabilities wasnt tested as we had to rap the position very urgently and we had very limited number of good resumes. But certainly, the employer's expectations was put across and a detailed technical discussion was carried. Though he wasnt excellent, he was much much better than the other for the cost we had. We always believe in grooming employee's to help them perform much better.
2. Yes, he had been set on a career graph, given clean picture on what his job requirements are.
3. I agree upgradation has to happen. Since we are a start-up we cannot offer him to take up courses, but we have put it across to him that he must attend courses to gain knowledge and that we will be flexible on his work to facilitate his learning.
4. Yes maam, we do feel that. Thats exactly what we have been doing from past 3 months.
5. He did match to our job requirements and thats what he was interested for. Im not saying he lacks in all the aspects. He has the knowledge but he doesnt know where and when to apply it until told to do so. He is being mechanical. We want him to be pro-active. If not for major decisions, at least for the one which he can think for, we need him to make such decisions for himself.
To add on,
I conducted little programs to enhance his decision making ability and think out of the box. Other programs to improve his communication and skills is in process too. My intention is never to bring down his salary, coz i know standing in my employee's shoes, its very painful to do so. MD is sitting with him for every task assisting him how to go about it. By now we expected that he could get little hang of it. But its very slow. If we did not have intentions of pushing him to go better and give him good career exposure, we would have been harsh. But thats not ethical.
Most of the programs that we can do in our limits is been done and still doing to push him. Every week we counsel him and understand his bottle necks. He says hes doing absolutely fine but he needs time to complete tasks. Thats fine, but absolutely fine is not shown in his work. The problem is, we cannot sit with him for every task assisting him coz we not running out on our time to finish our tasks.
Thats why i need alternate suggestions to avoid taking such action.
13th November 2017 From India, Bengaluru
Thanks a lot Mr. Murali and Arif UR Rehman for your feed backs. I am trying my best to achieve the points discussed in this thread.
Motivation programs are carried on every week in this company sir. Thats the foremost thing i take care of. Never want any employee low or down that affect his work. Till date that hasnt happened, hopefully will not happen :)
13th November 2017 From India, Bengaluru
Dear Aishwary,
Is any clause under the letter of appointment speaks of you can decrease one's salary? Did your letter of appointment speak of quantum of performance? Did you counsel the employee regarding his performance you looked for? Did you warn him for this? Is your standing order having the scope of decrease salary of employee?
If it is No then you can not decrease.
14th November 2017 From India, Mumbai
Dear Prabhat sir,
No sir, its not been mentioned in the offer letter, thats exactly what im afraid of. Its unethical to do so when its not mentioned in the offer letter. Apart from that, counselling and warnings have been given to the employee.
14th November 2017 From India, Bengaluru
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