Bonus Calculation Confusion: How Can We Fix the Fairness Issue in Our Company?

In our industry, from Day 01, old management personnel have traditionally calculated bonuses based on individual employees' basic pay + DA, without considering any ceiling limits. Now, my question is: a person receiving a lower salary will receive a higher bonus due to their basic pay + DA, while a person earning a higher salary will receive a lower bonus. How can we address this issue? Your prompt suggestions are greatly appreciated.

To address the issue of discrepancies in bonus calculation based on salary disparities, consider implementing the following steps:

1. Review and Revise Bonus Structure:
- Evaluate the current bonus calculation method and consider revising it to ensure fairness and equity across all salary levels.

2. Introduce Bonus Caps:
- Implement a bonus cap to prevent individuals with lower salaries from disproportionately benefiting from the bonus structure.

3. Performance-Based Bonuses:
- Introduce a performance-based bonus system that takes into account individual contributions and achievements rather than solely relying on basic pay + DA.

4. Transparent Communication:
- Clearly communicate any changes in the bonus calculation method to all employees to ensure transparency and understanding.

5. Employee Feedback:
- Seek feedback from employees on the revised bonus structure to gauge their perceptions and make further adjustments if necessary.

6. Regular Review:
- Regularly review the bonus system to address any emerging issues and ensure alignment with organizational goals and values.

By implementing these steps, you can create a more equitable bonus calculation system that aligns with both employee performance and organizational objectives.