Please Help Me To Understand My Salary Break Up

hello senior,
i am drawing 1.6 lacs PA, and my company is deducting 1k per month from my package as performance pay and they says they will give it to me at end of year, so my question is
is it fine to deduct amount from ctc as performance pay.. coz it has lowered my net salary.. help me to understand.. i am also in hr... currently handling admin.. but still need to learn so many things

Dear Imok,
Its fair enough, to deduct Rs. 1000/- as performance pay.
But this mostly applies for the sales & marketing and even for the technical people, which the same will be paid quaterly, half-yearly and Annualy (Differs from company to company ). whereas for the Junior HR & Admin person, its for the first time, that i have heard.
This deduction of performance incentive, paid annually would be retain the employee for the longer duration.
Anyways, be aware of the performance evaluation process and their criteria.
Cheers,
Sunil

Hi please visit the discussion under this thread https://www.citehr.com/431809-how-ca...ml#post1961810

they are deducting it from every employees salary..... cant do anything.. except looking for a change

Dear Imok,

I have too come across many IT / Non IT companies with same practice. And to be specific it is not only for marketing division - even administrative staff has the same clause. It is because in recent time the KRA weightage method is prevalent.

In mid 90's the trend was to retain some amount of salary from the CTC which is paid on completion of certain tenure or any such condition. Nowadays, the same concept has been modified and termed as performance incentive which gives the employer an upper hand to pay the specified amount in full or partially depending on your performance.

You can clarify with your management;

1. Whether Rs. 1,000/- is a fixed amount you'll receive at the end of the tenure.

OR

2. Whether it is included at an average performance and can increase or decrease with the kind of performance.

And what is the evaluation procedure for calculating such incentive.

Every company would have one or the other clause which you might not like but you cannot quit the company every now & then. It is better to play safe with the current employer and look for change only once you gain ample knowledge & experience.

Regards,

Hiral

Dear Imok,
This is interesting. Have any standards been decided or negotiated? You must insist for that and set a standard that will also help the company and you both when you strive to achieve that.

Imok
1. Was this disclosed to you when you joined or during your interview ?
2. Is this being deducted from your salary or is it a part of your CTC.
The response will be different depending on the answer to the above

These days, the CTC is calculated with the elements of Gross+Co's Contribution for PF / ESI / Gratuty+Other benefits / perks+PLI (Productivity Linked Incentives).
The PLI will include the min PLI and max PLI. Therefore, the CTC will have a assured minimum amount (if PLI is not given for various reasons) and maximum CTC includes the maximum PLI for the individual depending on his/her grade and designation.
The PLI has two components - a percentage based on the Company's performance and the rest based on the individual's performance (Appraisals). Normally, the PLI is given once a year.
Coming to the question posed, the employee MUST know how the CTC is calculated before he/she joining and it should be transparent to everyone. This is basic ethics - which is seldom exhibited!!
Rajusiachen

It is too harsh to use these words - "which is seldom exhibited".
Even a fresher in these days is well aware of what is a CTC & what is NTH (net take home / cash on hand). When a job is offered, companies communicate the structure. And if at all - if we (for time being) agree to what you mentioned, any competent individual will surely ask about his Salary Break Up. Even here, Imok was aware that Rs. 1000/- will form a part of performance pay in CTC which means things were not hidden. It is just that he should have not accepted it on face right away and should have asked for more clarity as to how is it calculated or what is the base for it or is it maximum/minimum/average.
Meanwhile, he said that it is maximum and can be reduced if performance is not found good which further means that the clarity over the same was given.
I do not mean to offend you in any way but just because of some instances, where we've not heard from both sides, one must not draw conclusion.