Hello, We presently have a fixed and variable salary component and are in the process of doing our performance management.
The total salary i.e fixed and variable portion is considered as a cost to company.
Should the percentage of increment be worked on the total CTC of previous year or on the actual pay out i.e fixed salary plus the variable portion earned?
Eg. A persons CTC is 100 with 95 as the fixed portion and 5 as the variable portion. An increment of 10 is offered. Please suggest which scenario is right.
Scenario A - 100+10=110
Scenario B - 95+10=105