Understanding Performance Bonuses: How Are They Calculated in IT vs. Manufacturing?

Hi, I have the following questions that I need your help with:

Performance Bonus Calculation

1. How is the performance bonus calculated for the CTC? Is it a percentage of just the BASIC or BASIC+HRA+SPECIAL ALLOWANCE? What is the percentage range and the general average percentage in the industry?

IT Employee in a Manufacturing Setup

2. How would the above question change for an IT employee working in a manufacturing setup?

I am awaiting your early response.

Regards, Kumar

Firstly, it is clear from your question that you are not talking about a bonus under The Payment of Bonus Act 1965. Therefore, you are talking about a "payment" (lump sum) that an employer is willing to make to their employees. If so, there has to be a "scheme" devised by the employer covering eligibilities, quantities, rules, and other procedural aspects. The employer has the right to do so! There is no "industry average" needed to be looked at. It is solely the employer's decision on what they can "afford" or how much they wish to apply for this scheme.

Now, whether to include it in CTC is a decision of the employer. Conceptually, it is wrong since if an employee does not become eligible to receive the same in any period, then they will be deprived of something that they had negotiated. When and if this happens, employees rightly feel cheated.

Regarding your second question, IT employees are like other employees wherever they work. The scheme as may be finalized will answer this question. Since the work of different groups is different, rules and eligibilities may be different as the "work measurement" for each group may need a different approach, but it is only natural.

I trust your queries are answered.

Regards,
Samvedan