Time for aligning incentives with performance

Time for aligning incentives with performance

1. Highway Cargo Mover’s Pvt. Ltd. had a fairly structured compensation policy that had components of fixed & variable pay apart from incentive structures. Employees felt satisfied & secured by and large with the simple and transparent compensation structure. There also existed a quarterly incentive scheme at individual & group level depending on nature of work of the departments. All of this kept the employees motivated and well rewarded that in turn increased customer satisfaction levels. However during Covid-19 pandemic times, Highway Cargo Movers decided to restructure the compensation package, objective being to increase variable pay component and reduce the fixed pay in a reasonable proportion. This didn’t go down well with the employees who all of a sudden started feeling insecure in their jobs. This was further aggravated by the fact that department heads increased targets at their level. Employees felt that by increasing the targets, management did not want to pay the incentives also they felt that the targets were not...

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Mihir Gosalia

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