I am HR in a logistics company. In our company, there is a rider on a fixed salary who has requested a bonus. We are considering transitioning to a commission-based structure. Please provide me with specific terms outlined in our company policies. Instead of referring to this compensation as a salary, we want to use a different term that does not imply a bonus payment. Please assist me with this adjustment and offer suggestions on how we can implement it effectively.
From India, Pune
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From India, Pune
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You said you are in HR, presumably a Human Resource Manager, Executive, Officer, etc. What is your role? As an HR Officer, your role is not to deny any rights of an employee under the statute. Your driver has been working for the organization, and you pay him a salary. How can it be called by any other name? How can the rights of the employee change when you just change the name from salary to commission?
What is commission?
Commission is a payment given to a broker, agent, or others expressed as a percentage of the value of revenue realized. It can be offered as an additional incentive to an employee whose output or service can be quantified. But it cannot be made applicable to all types of employees.
Challenges in linking a driver's service to output
How can a driver's service be linked to his output? Not possible. For the kilometers traveled, he can be given an incentive so that no overtime wages need to be paid. But that should be over and above a fixed salary. That salary will attract PF, ESI, and Bonus and, at a later stage, Gratuity also. If your responsibility is to take away these statutory contributions from the employee, you are mistaken; the employees will turn hostile.
Any amount paid for the service of an employee is wages or salary, whatever the nomenclature. Therefore, there is no way out, but if his basic wages are within the bonus brackets (say Rs 21,000 or less), he should be paid a bonus; you cannot refuse it.
From India, Kannur
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4508What is commission?
Commission is a payment given to a broker, agent, or others expressed as a percentage of the value of revenue realized. It can be offered as an additional incentive to an employee whose output or service can be quantified. But it cannot be made applicable to all types of employees.
Challenges in linking a driver's service to output
How can a driver's service be linked to his output? Not possible. For the kilometers traveled, he can be given an incentive so that no overtime wages need to be paid. But that should be over and above a fixed salary. That salary will attract PF, ESI, and Bonus and, at a later stage, Gratuity also. If your responsibility is to take away these statutory contributions from the employee, you are mistaken; the employees will turn hostile.
Any amount paid for the service of an employee is wages or salary, whatever the nomenclature. Therefore, there is no way out, but if his basic wages are within the bonus brackets (say Rs 21,000 or less), he should be paid a bonus; you cannot refuse it.
From India, Kannur
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