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Negative Incentive Policy
Human Resources » Compensation & Benefits

Chrm Message From: lingam Total Posts: 21 Join Date: 31/08/2009
Rank: Executive Post Date: 30/12/2016 06:34:45 Points: 105 Location: India


I have joined this organization recently and have learnt there is a negative incentive policy in effect at our manafacturing facilities. This is from the productivity perspective and linked to wages of workmen. To say, a workman has to deliver a fixed output per day which failing which there shall be a deduction in his wages..

Since I haven't encountered such a situation in my past employments, I want to ask if such is legally valid?



Chrm Message From: rammohan Total Posts: 26 Join Date: 31/08/2009  
Rank: Executive Post Date: 30/12/2016 06:38:33 Points: 130 Location: India

Dear lingam,

I think a salary deduction for not meeting specified production targets can be a violation of payment of wages act. You may want to discuss with your legal counsel and discuss with management, if need be, to manage as this can be a sensitive scenario and could have legal implications as well.


Chrm Message From: raghu Total Posts: 51 Join Date: 31/08/2009  
Rank: Manager Post Date: 30/12/2016 06:42:20 Points: 255 Location: India

I can tell you from my past experience of having faced a similar situation couple of years ago - if such a practice has been in place for a long time, then culturally it shall be difficult for you to challenge the status quo / mindset or for that matter reverse such a policy. Nonetheless, I suggest you flag it off to management for their consideration as you're obligated to highlight such a practise and related legal implications from HR/ER perspective and then decide the course of action. 

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