Is Deducting Pay for Being Late Hurting Employee Motivation? Seeking HR Insights

Hello All, I have recently joined a Pvt. Ltd. company in which the salary is calculated in such a way that if an employee is late for 15 minutes more than 3 times, there will be a deduction in the salary according to the minutes they are late. For example, if they arrive at 9:20 am 4 times a month, 80 minutes of their salary will be deducted. If they arrive at 10 am once in a month (after obtaining permission from their boss), 1 hour of their salary will be deducted. As an HR professional working with a reputable organization, I do not consider this a healthy practice and beneficial for employee motivation. This system often results in employees receiving varying salary figures every month.

Gratuity Deduction Issue

We have Gratuity deducted from the salary, but it is not mentioned in the salary slip or the CTC breakdown.

Request for Suggestions

Please suggest if the current practice is appropriate or if changes are needed. Additionally, we have a manufacturing unit, and the head office and plant staff are located at separate venues.

Thanks!

Whatever you have stated above can be considered as the policy of your organization aimed at instilling a sense of discipline among the employees. Organizational policies may vary from one organization to another. In some organizations, I have observed policies where employees are allowed a grace period of up to 10 minutes on three occasions per month. However, if an employee is late by more than 20 minutes on a single occasion, it will be considered as half a day of absence.

If your organization is deducting any gratuity amount from employees' monthly salaries, it is completely wrong and an unethical practice. As an HR professional, you should suggest and persuade your superiors to abolish this practice.

Thank you.

Salary Deduction for Latecoming

It is absolutely correct to deduct salary for latecoming. It is not correct to say that it will demotivate people. In fact, in my experience, most of the employees come on time. You can even observe that the people who are coming late mostly are the same people. If you do not deduct salary from these people, then those who are regularly coming on time will get demotivated. This practice is very common and in no way lowers morale in the long run.

Understanding CTC and Salary

CTC is a calculation of the cost of an employee. It is not part of the wage slip, and no one will show this. Again, there is no deduction of gratuity from salary. When we talk about CTC, we add benefits like gratuity, bonus, etc. However, we also provide a letter stating the salary breakup for monthly, annual benefits, and statutory benefits. Please understand the difference between CTC and salary. There are a number of posts in the citehr itself, and these posts will help you understand the difference.

Regards,
Sivasankaran