HI For a promotion case can we deducted x amount from assured pay and showed as increased incentive for new role, is this correct a practice.
From India, Delhi
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From India, Delhi
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YAGS06 If it is part of your employment contract i.e CTC. In such case it is part of salary. R D Watve
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CTC says that this is apart from assured pay, coming under earning potential.
When we joined this organization, we were hired on assured pay only. Over a period of time, the system changed and started paying incentives based on good performance. This has always been apart from your basic salary, HRA, statutory bonus, FBP, etc.
Now the question is: Can a company deduct a part of your assured pay and show it as an increment in incentives? They are even asking us to sign a consent letter.
From India, Delhi
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When we joined this organization, we were hired on assured pay only. Over a period of time, the system changed and started paying incentives based on good performance. This has always been apart from your basic salary, HRA, statutory bonus, FBP, etc.
Now the question is: Can a company deduct a part of your assured pay and show it as an increment in incentives? They are even asking us to sign a consent letter.
From India, Delhi
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Dear Yags06
Let us understand the different terms & definitions here:
1. Promotion – A promotion indicates an upward movement in a grade and salary structure due to increase in job scope. E.g. Technician to Senior Technician.
2. Assured pay – Also known as Base pay is a guaranteed pay to reward the jobholder for the expected job scope. E.g. Technician is paid S$1200 while Senior Technician with larger job scope is paid S$2000. Base pay is job-scope driven.
3. Incentive – An incentive is variable pay and is link to performance or improved performance. E.g. increased in productivity leads to a productivity incentive payout. Incentive is not a component of Base pay. But the summation of Base pay and incentive and other performance-linked variables will derive Total Cash or CTC, which is your earning potential.
To answer your question:
x amount from Base pay CANNOT be deducted to show increased in incentive in a promotion because even though you have been promoted to do a bigger job, your guaranteed pay has just been reduced and you have to earn it back by meeting a bigger productivity quota.
This is an unlawful practice and you should not sign on any document until all your concerns are addressed by your HR.
Regards
Autumn Jane
From Singapore, Singapore
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Let us understand the different terms & definitions here:
1. Promotion – A promotion indicates an upward movement in a grade and salary structure due to increase in job scope. E.g. Technician to Senior Technician.
2. Assured pay – Also known as Base pay is a guaranteed pay to reward the jobholder for the expected job scope. E.g. Technician is paid S$1200 while Senior Technician with larger job scope is paid S$2000. Base pay is job-scope driven.
3. Incentive – An incentive is variable pay and is link to performance or improved performance. E.g. increased in productivity leads to a productivity incentive payout. Incentive is not a component of Base pay. But the summation of Base pay and incentive and other performance-linked variables will derive Total Cash or CTC, which is your earning potential.
To answer your question:
x amount from Base pay CANNOT be deducted to show increased in incentive in a promotion because even though you have been promoted to do a bigger job, your guaranteed pay has just been reduced and you have to earn it back by meeting a bigger productivity quota.
This is an unlawful practice and you should not sign on any document until all your concerns are addressed by your HR.
Regards
Autumn Jane
From Singapore, Singapore
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Incentive is non-committed CTC as it varies depending upon the performance of the individual.
From India, Lucknow
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From India, Lucknow
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Thanks, Autumn Jane.
One catch is that for a period of 3 months, the new role is under a training period. During this period, on one side, they are not increasing the salary structure (upgraded) for the training period, and on the other hand, they want to increase the incentive by deducting from the base salary.
Now, do we have to add on something in the previous statement, or do we still have a genuine concern?
From India, Delhi
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One catch is that for a period of 3 months, the new role is under a training period. During this period, on one side, they are not increasing the salary structure (upgraded) for the training period, and on the other hand, they want to increase the incentive by deducting from the base salary.
Now, do we have to add on something in the previous statement, or do we still have a genuine concern?
From India, Delhi
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Dear Yags06,
Annual increment, promotion increment, and incentive are part of salary administration. Different organizations may have different policies and procedures, but in general, these are a few options:
1. A promotion can only take place when said employees have consistently, over a period of time (usually 2-3 years), not only met but exceeded expectations.
2. Option 1: The promoted employee receives a promotion letter detailing new job scopes, a new grade, and a new salary range with an effective date. The effective date can be with immediate effect or back-pay depending on the arrangement between the employee and the company.
3. Option 2: The promoted employee needs to go through training or "probation" to be competent. They may continue to receive the existing salary and get back-pay.
4. Option 3: The promoted employee receives an "acting" allowance in addition to the existing salary during training. This allowance can be taken away if the promotion did not materialize or be formally given as an increase in base pay if the promotion takes place. In this instance, communication is key.
Whatever option is chosen, no cutting of the base salary is allowed if it is a clear case of promotion.
Regards,
Autumn Jane
From Singapore, Singapore
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Annual increment, promotion increment, and incentive are part of salary administration. Different organizations may have different policies and procedures, but in general, these are a few options:
1. A promotion can only take place when said employees have consistently, over a period of time (usually 2-3 years), not only met but exceeded expectations.
2. Option 1: The promoted employee receives a promotion letter detailing new job scopes, a new grade, and a new salary range with an effective date. The effective date can be with immediate effect or back-pay depending on the arrangement between the employee and the company.
3. Option 2: The promoted employee needs to go through training or "probation" to be competent. They may continue to receive the existing salary and get back-pay.
4. Option 3: The promoted employee receives an "acting" allowance in addition to the existing salary during training. This allowance can be taken away if the promotion did not materialize or be formally given as an increase in base pay if the promotion takes place. In this instance, communication is key.
Whatever option is chosen, no cutting of the base salary is allowed if it is a clear case of promotion.
Regards,
Autumn Jane
From Singapore, Singapore
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