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Pritam (x)     11 April 2011

Query on Annual Incentive

This is Query on annual incentive Policy of xxx Company
Annual incentive is variable amount
that is depends on employee performance and Business unit Recomendation according to company policy.
I have got response from HR saying that the Business unit has recommended 40 % of Annual incentive to you.
Can u advice me on this.Can it be challenged in court and how i can proceed.
I am Resigned Employee of XXX Company. I was working in XXX company for a period of 3.5 Years.

There was no performance Appraisal being done since i have resigned just before the Financial year. I am being told in Email that "normally for Resigned cases there is payout in the range of 40%". There is no policy as such.
Pls Advise.


 4 Replies

Kumar Doab (FIN)     11 April 2011

The incentive policy is a published document and circulated to the employees.

It is usually mentioned that at the time of disbursement of incentive payout, the employee should be in the service, and the interpretation of the clauses by the management shall be final.

Since you are the employee and you have the document you may carefully read it.

Since you resigned and still 40% is being paid to you, let it be supplied to you.

You can ask for the document/documents vide which the applicability to a resigned employee was stated.

 Is it mentioned in your ppointment letter that you shall be eligible for performance related incentives announced from time to time?


Pritam (x)     12 April 2011


Thank you for the Feedback.

There is no such point mentioned in the Annual Incentive policy, that for a resigned employee, 40 % or in the range of 40% will be given to the Employee. This confirmed by the HR.

Also, there is Seperate component called Monthly Performance Pay (MPP) which is given to the Employee along with the Salary. According to MPP Policy, i have to give back the MPP for 3 months Which is also the notice period if i am resigning.

This MPP i have already given to them while resigning.

Kumar Doab (FIN)     12 April 2011

It is believed that the confirmation by HR is verbal, and that you enjoy good rapport and the company is responding to your queries.

In incentive policy usually it is stated that interpretation of the clauses by the management and decision of the management on incentives shall be final.

If possible you may use your resources and obtain a copy of the annual incentive policy. Based on the annual incentive policy you can contest.

Did you remain in the employment for the full period of the annual incentive policy?

You have mentioned there is a separate component called Monthly Performance Pay (MPP) which is given to the Employee along with the Salary. In your offer letter issued to you before joining, or your appointment letter issued to you at the time of joining, is there any or detailed descripttion of MPP. Is MPP part of your CTC?

It is believed MPP is a variable component and based on monthly performance it can vary.

You have mentioned "According to MPP Policy, I have to give back the MPP for 3 months which is also the notice period if I am resigning. This MPP I have already given to them while resigning",

This implies that:

-your notice period is 3 months and in case of resignation without prior notice, you have to tender notice pay.

-You have to and you have paid 3 months MPP. In addition you have to tender notice pay. So in case of resignation with immediate effect you shall pay for 6 months (3months MPP+3 months notice pay)

-MPP is a policy and this policy is applicable to you. Is MPP policy a part of your employment contract? Is MPP policy stated in your appointment letter? Have you accepted it in writing? 

The impression is that company likes to pay more to performing employees and wants majority of the employees to be near best level of performance.

The company has enforced an airtight process of collecting MPP and a major chunk of annual incentives, both of which are earned due to highest level of performance, although company is silent on amount to be paid to the departed employee at the time of disbursement of annual incentive. Company should be fair and should state this clearly like they have in many other policies they have enforced.

Company should supply a copy of the annual incentive policy also.


You may represent in writing under receipt, to the good offices of your appointing authority, MD, CEO, Head-HR, Company secretary, and mention that you have always strived to give best of your performance and exerted to earn the payouts and wages expressed in the MPP and annual incentive policy of the company and have earned them with the performance delivered by you.

 You may mention that you have given highest priority to your job and responsibilities and cared less for your personal time, and convenience.

You may request their good office to disburse you the 100% of the annual incentive earned by you(if you have worked for period of the annual incentive).

Susanta Chakraborty ( )     15 April 2011

Good reply ...

1 Like

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