Hi Can we consider the Performance Bonus is the part of CTC?
From India, Shimla
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From India, Shimla
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Performance Bonus is called a variable bonus; hence, 100% cannot be considered as part of the CTC.
Types of Performance Bonus
Type 1 – Performance Bonus based on Individual Performance: If an employee performs well, he/she will receive the performance bonus as per the given/recommended calculations.
Type 2 – Performance Bonus based on Individual (50%) & Company (50%) Performance: The employee's performance will be calculated separately, and company performance will be calculated based on goals and achievements.
Performance bonus is a very relative term. It is paid only if performance is shown, hence 100% cannot be part of the CTC. You can consider a min-max percentage that the employee must achieve (i.e., either 50%, 60%, or 70%) during the bonus period. Based on the company's past performance history, we can always fix a min-max percentage that can be considered as part of the CTC. (Again, the performance bonus scheme needs to be shared with the candidate so that it is clear to them that it is variable and not fixed.)
Finally, the performance bonus can be shown as part of the CTC, but historical percentages need to be shown. A 100% performance bonus is not possible every time; hence, showing a larger picture and not paying will not be justified. Therefore, we can consider a min-max percentage of the performance bonus as part of the CTC.
BrainLight HR Solutions
From India, Mumbai
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18Types of Performance Bonus
Type 1 – Performance Bonus based on Individual Performance: If an employee performs well, he/she will receive the performance bonus as per the given/recommended calculations.
Type 2 – Performance Bonus based on Individual (50%) & Company (50%) Performance: The employee's performance will be calculated separately, and company performance will be calculated based on goals and achievements.
Performance bonus is a very relative term. It is paid only if performance is shown, hence 100% cannot be part of the CTC. You can consider a min-max percentage that the employee must achieve (i.e., either 50%, 60%, or 70%) during the bonus period. Based on the company's past performance history, we can always fix a min-max percentage that can be considered as part of the CTC. (Again, the performance bonus scheme needs to be shared with the candidate so that it is clear to them that it is variable and not fixed.)
Finally, the performance bonus can be shown as part of the CTC, but historical percentages need to be shown. A 100% performance bonus is not possible every time; hence, showing a larger picture and not paying will not be justified. Therefore, we can consider a min-max percentage of the performance bonus as part of the CTC.
BrainLight HR Solutions
From India, Mumbai
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