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