Terminating Non-Performers: Should We Pay Full Salary or Deduct as Penalty?

Hi All, My company wants to terminate two employees who are not performing well. I would like to inquire about the salary that needs to be paid to these individuals. Should we pay their actual salary or implement some form of deduction as a penalty?

Thanks and regards, Sakshi

Salary and Performance

Employee gets the salary not for performance but for spending his/her working hours in a particular workplace. Incentive and bonus are the tools for performance measurement. So, salary can't be deducted.

Regards,
Poonam Yadav

I fully agree with Poonam Yadav. If you intend to deduct, you have to do it from his performance incentive.

Regards,
MS

We have a contract employee whose notice period is 1 day. He is not performing well, so I want to know how much time I have to give him notice before terminating his contract.

Dear Sakshi,

You cannot stop or reduce the salary of an employee unless resorting to the process of disciplinary action against an employee for misconduct on their part. However, poor performance does not fall within the scope of misconduct unless the employee is found guilty of dereliction of their duties and responsibilities or fails to achieve the prescribed targets.

If you want better performance from the employee, it is advisable to establish specific targets for them to achieve. Subsequently, you can take disciplinary action for failure to meet the stated targets and for neglecting orders from management. It is essential to ensure that the targets are reasonable. Performance varies among employees depending on their individual capabilities, capacities, and work environments. Therefore, it is also important to evaluate the work environments in which the employee is placed.

Regards.

Amit, thank you for your attachment regarding the termination of employees or workers. Kindly read the termination policy (in the Factory Act and Labour Act) before taking any action. In the termination policy, clearly mention that for any action, you need a reason with proof.

With regards,
Sameer K Ghosh

Apart from the points brought up, you are required to provide payment for accumulated leave for the current year and previous years as per your company's policy. Additionally, as pointed out by Mr. Dhingra, termination decisions should be based on the performance against set Key Result Areas (KRAs), which should be documented through counseling letters, appraisals, or warnings.

Regards,
Rajusiachen

Let us stop commenting on other contributors. Shall we restrict ourselves to only giving our views and suggestions?

Disclaimer Notice

Please be aware, in my opinion, the views expressed herein in the forum are not conclusive as they are expressed with inadequate details/information. I request all of you to do your own homework to ensure that you don't err on the wrong side. A "Disclaimer" is always active.

Termination Procedures

For termination, under whatever circumstances, a proper procedure should be followed. This procedure would largely depend on the terms & conditions of appointment, applicable laws, type of establishment, etc.

Still, nobody could guarantee that the issue of a suitable compensation package wouldn't arise.

Nevertheless, the terminated employee would have his/her own right to seek remedy under applicable laws which may include, if successful, reinstatement itself, with back wages in arrears, if your case is not strong enough and the procedure adopted is insufficient.

Regards, Kumar S.

While I do not agree that salary can be refused for a period already worked, your statement is totally unacceptable. It is only in government companies and PSU companies that people get paid simply to come to the office. In all private companies, you get paid to work, and performance is the basic and primary measure of it. That is why we have KRAs specified.

We have 40 people working for us. We pay no incentive or bonus, but they still work efficiently and sincerely.

However, the original point made is that salary has to be given to the person who has worked. Not because they gave their time (time given and nothing achieved is counterproductive) but probably because you will find it difficult to identify how much of the salary must be deducted for less performance.

(Note: They have achieved less than 50%, but it means they did work. If they had achieved zero, perhaps you could refuse salary. Again, it would be difficult to support in court, so better to pay it off to avoid hassle).

Another reason you can't refuse salary is that there's nothing in your appointment letter that states salary will not be given unless targets are met. I know some domestic DSA and BPO companies that do it. They have a very small fixed salary and the rest linked to targets. Even there, they pay the fixed salary.

[QUOTE=arup.chatterjee;1711237]

Dear All,

I mean to say that being an HR of a company, one should know our country's rules and regulations. If anyone asks such a basic thing, it looks unprofessional. If anyone is hurt by my view, I apologize.

Regards