Understanding CTC: Should Incentives Be Included or Not? Seeking Clarity!

ANTONY_XAVIER
Hi Friends,

I am confused. Will you please clarify for me? Some companies include incentives in CTC, while some do not. Which is right?

Regards
singhps21@indiatimes.com
Hi Antony,

I don't know on what grounds a company can include incentives in a CTC because if you look at it, incentives are additional monetary amounts given to an employee when they perform well enough and meet the expectations or achieve more than the expectations. To be more precise, it is "performance-based pay" which is variable in nature.

CTC is something that is fixed, which an employee would be getting during a year. So, what I understand is that incentives can't be included in CTC because how can anyone fix an additional monetary amount beforehand, which is variable in nature and based on somebody's performance that can keep changing every month. Because nobody can judge somebody's performance beforehand while fixing a CTC.

But at the same time, I have seen a couple of companies that fix their incentives right while fixing a CTC, based on the fact that no matter how good or bad the person would perform during a year, they would be entitled to only a fixed amount as incentives. Nothing less, nothing more, which I personally think can never be an encouraging or motivating tool for the employees to work better.

Hope this helps.

Regards
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