Variable Pay is based on performance criteria. This is universally accepted in the corporate world. Based on your performance percentage, one becomes eligible to receive the variable pay amount. However, there is also a minimum limit below which, if the performance score is achieved, one does not become eligible for the variable payment/pay for performance. For example, the minimum performance percentage should not be less than 70.
Responsibilities of Divisional Head and HR Department
It is the duty of the Divisional Head or HR Department to make these performance mapping and variable payment parameters known to all employees (including new joiners) at the beginning of the financial year itself or during the Employee Induction for new joiners. This enables the employee to plan, evaluate, and improve their performance from time to time. Moreover, if the employee's performance is not as per expectations, it is the duty of the Reporting Manager to discuss and help the employee improve performance with proper training, mentoring, or counseling.
Performance Assessment and Legal Advice
It seems in your case, it has not been done if your company feels that your performance is below par. They should have assessed your performance on a timely basis and should have given you inputs for improvement. Most companies have an online performance tracking system, which is transparent and an indicator of one's performance. If your company has failed to communicate about the performance parameters or pointed out your poor performance at the beginning or mid of the year, you can seek legal advice in this case.
I would suggest that before taking legal action, please once again refer to and confirm the Performance Management/Appraisal policies, documents issued to you by the company, as to whether they have indicated about performance; else, the legal action will be ineffective.
Please revert for any further queries.
Regards,
Sumeet