Dear Members,
Performance-based incentives are part of the salary structure in my organization. One of our employees, who has been with us since the inception of the organization, was initially given an appointment letter where the variable pay was calculated at 10% of the basic salary. Due to the initial stage of the organization, there were many changes made to the salary structure to make it more competitive. Subsequently, the variable pay was revised to 10% of the Cost to Company (CTC).
Though the above change was communicated to the employee, he is now referring back to the appointment letter and requesting the difference to be paid to him. Additionally, my organization is not performing well financially, making it challenging to part with this resource. Given this situation, would it be advisable to pay the difference and consider reducing his variable pay in line with the terms of the original appointment letter going forward?
I am seeking suggestions on how to handle this matter.
Thank you.
Regards,
Nikita
From India
Acknowledge(0)
Amend(0)
4Performance-based incentives are part of the salary structure in my organization. One of our employees, who has been with us since the inception of the organization, was initially given an appointment letter where the variable pay was calculated at 10% of the basic salary. Due to the initial stage of the organization, there were many changes made to the salary structure to make it more competitive. Subsequently, the variable pay was revised to 10% of the Cost to Company (CTC).
Though the above change was communicated to the employee, he is now referring back to the appointment letter and requesting the difference to be paid to him. Additionally, my organization is not performing well financially, making it challenging to part with this resource. Given this situation, would it be advisable to pay the difference and consider reducing his variable pay in line with the terms of the original appointment letter going forward?
I am seeking suggestions on how to handle this matter.
Thank you.
Regards,
Nikita
From India
Acknowledge(0)Amend(0)
Hi Nikita,
Even we faced the same issue in our organization. But before he could proceed further, we provided him with a copy of the 'Revised Terms of Employment' for the employee, where all the terms and conditions of his employment are set according to the present and future expected performance of our company. Our employee did not cause much trouble since he has been with the firm from the beginning. We sat down with him and explained the current situation of the company. He clearly understood us and signed the 'Revised Terms of Employment' without any issue.
I'm unsure if this information will be helpful to you. If it does help, I will be glad.
Regards,
Vasanth
From India, Pune
Acknowledge(0)Amend(0)
Even we faced the same issue in our organization. But before he could proceed further, we provided him with a copy of the 'Revised Terms of Employment' for the employee, where all the terms and conditions of his employment are set according to the present and future expected performance of our company. Our employee did not cause much trouble since he has been with the firm from the beginning. We sat down with him and explained the current situation of the company. He clearly understood us and signed the 'Revised Terms of Employment' without any issue.
I'm unsure if this information will be helpful to you. If it does help, I will be glad.
Regards,
Vasanth
From India, Pune
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Variable Pay & Executive Compensation.pd f
VARIABLE PAY.doc