Dear Friends,
We calculate bonus for our employees from the period of October to September every year and distribute well in advance of Deepavali. Now we would like to reschedule the calculation period in line with Payment of Bonus Act 1965, that is April to March, but our employees are not willing as this conversion will reduce the bonus what they have earned in previous year. We have a regular practice of giving 16.66% as bonus. Please advise a suitable package so that this conversion can be smoothly handled.
My factory is in Tirupur dealing with Garment manufacturing.
With anticipation
From India, Tiruppur
12We calculate bonus for our employees from the period of October to September every year and distribute well in advance of Deepavali. Now we would like to reschedule the calculation period in line with Payment of Bonus Act 1965, that is April to March, but our employees are not willing as this conversion will reduce the bonus what they have earned in previous year. We have a regular practice of giving 16.66% as bonus. Please advise a suitable package so that this conversion can be smoothly handled.
My factory is in Tirupur dealing with Garment manufacturing.
With anticipation
From India, Tiruppur
dear could not understand your query because oct to march is only 6 month. can u pls clarify it . tks j s malik
From India, Delhi
From India, Delhi
Hi Ram
Greetings.
Your case is a typical one and happens anywhere. If I am correct your bonus cycle is OCT TO SEPT which you would like to change as Apr to Mar as per Bonus act which the workers questions as they would be receiving less amt. Your question will be resolved as follows.
1. You pay the bonus as per the act 16.66% for the period April to March to them.
2. You also calculate bonus for the period April to October`08 and pay this as advance to them.(With out disbursing the amount)
3. This advance amount has to be adjusted in the future bonus (Hence convince the workers on the above formula, I dont think any other formula works out except this)
Cheers
Trisha
HR Professional
From India, New Delhi
Greetings.
Your case is a typical one and happens anywhere. If I am correct your bonus cycle is OCT TO SEPT which you would like to change as Apr to Mar as per Bonus act which the workers questions as they would be receiving less amt. Your question will be resolved as follows.
1. You pay the bonus as per the act 16.66% for the period April to March to them.
2. You also calculate bonus for the period April to October`08 and pay this as advance to them.(With out disbursing the amount)
3. This advance amount has to be adjusted in the future bonus (Hence convince the workers on the above formula, I dont think any other formula works out except this)
Cheers
Trisha
HR Professional
From India, New Delhi
Hi,
We had two three brain storming sessions to arrive a solution. Some points are as follows:
1. Calculate bonus for April 2007 to 2008 March and distribute in Oct 08 ( Here April 2007 to Sep 07 period is already claculated)
2. Calculate 11 months bonus ( i.e., Oct to Aug, Sep to Jul and Aug to June and so on ) and give, over 6 years period April to March system will be come in to place
3. As this is too lengthy period, it is further suggested to have 9 months (Oct to June and July to March) as bonus calculation period for two years.
4. In any case, bonus is reduced to less than 12 months, some incentive can be suggested..
Can anyone suggest better options... so that both employee as well as management will be in a win win situation
From India, Tiruppur
We had two three brain storming sessions to arrive a solution. Some points are as follows:
1. Calculate bonus for April 2007 to 2008 March and distribute in Oct 08 ( Here April 2007 to Sep 07 period is already claculated)
2. Calculate 11 months bonus ( i.e., Oct to Aug, Sep to Jul and Aug to June and so on ) and give, over 6 years period April to March system will be come in to place
3. As this is too lengthy period, it is further suggested to have 9 months (Oct to June and July to March) as bonus calculation period for two years.
4. In any case, bonus is reduced to less than 12 months, some incentive can be suggested..
Can anyone suggest better options... so that both employee as well as management will be in a win win situation
From India, Tiruppur
You may consider the option of paying the minimum bonus as per act and the rest as ex-gratia. That way, you could try 2 ex-gratia payments in this financial year (bonus+exgratia in oct08, only ex-gratia in Apr09 for Oct08 to Mar09 period), communicate to the employees in advance of the new bonus cycle from next year. The financial year is taken care of and the prorata money goes to the employee.
You will have to verify the applicability of the above suggestion, i have not tried it before myself. The six-year exercise looks too cumbersome and administratively very taxing.
You will have to verify the applicability of the above suggestion, i have not tried it before myself. The six-year exercise looks too cumbersome and administratively very taxing.
Dear Raghesh, Your suggestion is seems to be interesting, only the challenge is to convince our emplyees for minimum bonus as the practice for many years was to give 16.66%
From India, Tiruppur
From India, Tiruppur
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Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf