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I run an NGO where we have a few permanent employees. One of them has been consistently underperforming and his lack of commitment to his tasks and duties is obvious. Can I reduce his salary as a punishment?
From India, Ahmedabad

I would suggest talk to him in person and tell him your concern.
Ask him about his problem for not performing his duties up to the mark. Get to know his situation first and act accordingly.
Give him a polite verbal warning to improve and observe him for few days. Assign him tasks and check how he performs and how serious his consider those tasks.
In case he is still not able to perform well give him a written warning.

From India, Gurgaon

The answer depends on how may people are working, whether factories act or shop & establishment applies and whether standing orders and industrial dispute act applies.
To be safe, it is better to give a written warning as provided in Model Standing Orders.
I think you need to give 2 warnings and then a notice warning him of reduction in salary if he does not improve
The warnings must be specific giving the details of his failure or his mistakes. You can not be vague on this matter, or the exercise is meaningless

From India, Mumbai

A small organisation may not be well organised in terms of all orders/procedures etc.
But where an employee is consistently under performing,steps need to be taken to rectify situation.How has it been decided that employee is under performing?
Are there any output standards fixed and communicated to him/her?
Here what i can suggest is have a talk with concerned employee and document the discussion and get an action plan of work required to be done and time periods etc.
After this effort is done then monitor and give warnings etc if there is failure.
If still things do not work out pay cut can be considered.
Natural justice should pervade company actions-duly docume nted etc

From India, Pune

Coming to think of it, after Mr. Nathrao's post, i think you should figure out whether you should retain him or replace him with someone else better suited to your work (with due notice before you remove him so he can find another job)
a person with a salary cut generally resentful and disruptive.
If you do cut his salary, it is also better if you can get him to agree to the same and let him sign on the revised salary letter so there is evidence that it was not forced and the labour court is unlikely to give a judgement in his favour (note, i say unlikely because the court will consider all circumstances and even then the decision my favour the employee)

From India, Mumbai

Please understand the root causes/reasons of under-performance. An employer can give guidance, training and support to employee for performance/productivity. Proper communication between employer-employee will solve many problems. Lacking skills (physical/digital), lack of passion/motivation, ineffective communication and Family problems can convert a performed employee into an under performed employee. “Money” is the principal factor for motivation to work. Measure everything before reducing remuneration or reducing manpower.
Yours Sincerely,
Mohan Nair.

From India, Mumbai

The answer is No, you did not fix any criteria of performance. How do you justify, the reduced payment is justified for the position one held.

You ever apprised the employee that his performance is not up to mark or the work entrusted to him still pending/incomplete or any wrongful act. Is there anything in your policy that the establishment can reduce salary if performance not found satisfactory? May be his performance due to certain lacuna lies at management level which he could not escalate!

You need to call the person to discuss the issue before taking any harsh action done and inform the decision of management (when at your will you can not increase the salary). Instead of reduction of salary consider for no increment is well placed. In this particular issue our learned colleagues have analyzed the topic from different angles to guide you, it is you to decide how to move on.

From India, Mumbai

I prefer with the suggestion of the Mr. Prabhat and would like to put up a few add-on in line with the thread.

The person is categorized as permanent employee?? The person is whether categorized under permanent workmen (or) others.

If he is a delinquent employee build the proofs for work allotment and his performance records which is a proof for gravity of his misconduct.

Also ensure that his KPI & KRA's are bias free. Counsel the person after periodical review as a document.

Adhere the standing orders.

Issue SCN-1. Give him warning & training . Get every thing documented.

In spite of counselling, training and warning, stop his increment. The intention is to rrealizehis mistake and to correct himself but not to punish. Anyhow the legal application of the disciplinary proceedings shall be adhered to avoid reinstatement (or) grant of relief.

From India, Coimbatore
Reducing Salary Of One Underperforming Permanent Employee As A Punishment?
Trust me reducing salary will never enhance performance... Rather the situation will be more
Now coming to the topic of reduction, you have not mentioned whether it’s a part of your appointment clause.. I understand its generally not a part of appointment letter clause, additionally when we talk about performance it’s both way ..
From Employer to Employee & Vice Versa:-
#Employee understanding of his discussion during the Interview and his clarity towards his job
#The offered role & understanding
#Clear understanding of what kind of on job training being offered before you assess
# Please rate your support, availability from his co-worker, team coordinator & manager for spend time to discuss the employee understanding, doubts & concern.
Hence with periodic review and on job training with proper documentation you should assess him.

I will give practical advices -

1. Talk with empathy
2. Give him chance & resource to improve, without any bias/ego etc
3. If purpose of reducing salary is to improvement or let the candidate go on his own?
4. I think best to fire politely and help getting relevant job as per his capability
It is less painful and work culture will also not get spoiled
5. Next time you hire anyone, put fix and variable pay clearly, so this situation does not arise

From India, Morvi
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