Variable Pay Deductions: Beyond Performance, What HR Needs to Know

In what conditions will variable pay be deducted other than performance (mainly in HR terms)? Thank you.

Policy Violation

Deductions could occur if an employee violates company policies, leading to a reduction in their variable pay.

Attendance Issues

If an employee has excessive absences or tardiness, their variable pay might be impacted.

Misconduct

Variable pay could be reduced for instances of misconduct or behavior not aligned with the company's values.

Breach of Contract

Breaching employment terms could lead to deductions in variable pay.

Quality Issues

For roles with quality-driven metrics, deductions might occur due to subpar work quality.

Customer Complaints

If customer feedback indicates dissatisfaction, variable pay might be impacted.

Ethical Violations

Deductions could result from ethical breaches or conflicts of interest.

Project Delays

For project-based roles, if an employee causes project delays, variable pay might be affected.

Hi, The other possibility is if the employee didn't complete the qualifying period (if mentioned in the Appointment Order), then there are chances of the employer holding the variable pay. If the employee absconds from work, the employer might hold the variable pay along with the full and final settlement.