Productivity Linked Bonus - Rewarding Workmen Performance

Productivity Linked Bonus – Rewarding Workmen Performance on the Shop Floor

Productivity Linked Bonus - Rewarding Workmen Performance on the Shop Floor

By Namita Bharadwaj* 

With workmen compensation & benefits practices continuing to be an ever-critical part of an organization’s rewards strategy, organizations  are increasingly looking at opportunities to make the compensation package more attractive to its workmen, operators etc.  This is important to ensure protection against a continually increasing competition in both existing & new industrialized belts as well as the need of organizations for trained workforce – mirroring what they look for in the white collar roles.

Based on Mercer’s extensive Total Rewards Studies for workmen covering more than 100 organizations across key industrial belts in the country, Productivity Linked Bonus (PLB) is seen as one of the ways for organizations to recognize performance on the shop floor.

KEY HIGHLIGHTS OF RESEARCH ON PRODUCTIVITY LINKED BONUS PROGRAMS

  • Across industrial belts, there is an increasing trend towards building variability in employee salary & using easily measurable parameters for variable payouts

  • Individual & team productivity measures are key parameters to determine payouts other than attendance & adherence to safety which further underlines organizations’ focus on quality though not at the cost of employee safety

  • Greater the level of industrialization, higher the target payouts.

  • Payout frequency seen to lean more towards monthly payouts – indicative of organization’s keenness to continually motivate the shop floor operators

  • Similar trends seen within organizations across educational qualifications

    HIGH PREVALENCE OF PLB SEEN ACROSS INDUSTRIAL BELTS

    MOST LOCATIONS LEAN TOWARDS MORE FREQUENT PAYOUTS

     

    PLB PAYOUTS IN HEAVILIY INDUSTRIALIZED BELTS ARE MORE AGGRESSIVE (IN RUPEE TERMS)

     

  • The payouts in the market are typically:
  • Either given as a fixed amount across all grades/levels

  • Or a fixed % of Basic Pay

  • Or Fixed amount categorized by grade/experience

    * NCR – National Capital Region

ABOUT MERCER’S WORKMEN TOTAL REWARDS STUDIES

Irrespective of unionized or non-unionized industrial environments, Mercer’s studies help clients:

  • Understand the talent landscape in the location(s) where the client has manufacturing operations in

  • Understand key market compensation & practices trends in the location that they are operating in or starting operations in

  • Determine the organization’s workmen level compensation competitiveness – by educational qualification, experience & location profiles

View market offered benefits & practices in unionized & non-unionized environments

 

To request the full study report covering all key study findings and other elements to consider for employers, please fill out the form below.

Namita leads Mercer's Information Solutions Practice in India for the Automotive & Manufacturing and Engineering industries and is the Lead Consultant for the Talent Consulting Practice in North India 

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