Why we have bonus?

About 3 years back, I blogged how we did bonus calculation with performance rather making it fixed to one's salary. However, the way bonus management is done now is different. We have introduced a more transparent "Variable Pay" in employees CTC. There is still performance bonus and awards distributed annually.

The salary structure consist of Basic, HRA, Conveyance, Medical, PF and Other allowances. And hence forward around 10% of the annual salary is added as the Variable pay, which would be paid yearly (on the Annual function) or twice an year if the sum is large.

In a recent meeting where I discussed company's current news and plans, with the employees, the most that got attention was the plan to re-define the salary structure as stated above. The division has been introduced and the reaction so far is mix, so I should suggest what is wrong.

Any employee in a company should not expect a healthy bonus or revision, if s/he is doing the exact same kind of work in the exact same kind of time. That is, are you only performing what is allocated to you or are you outperforming? Or worst under-performing?

We have a chart that describes the expected work-profile, but then again, this is "expected" for the cost already spent.

To achieve a significant growth, do beyond expectations, improve your skills, decrease the time of delivery, and as Toby Lucich said in the comment:

"Differentiate Yourself through Performance. Start looking for that something extra, a unique way to visibly shine. I'm not saying you should sign up for every random task, but keep an eye out for work that is important and bonus-worthy.

When you come to the end of the next quarter, recap your deliverables with your manager. Let them know that you love to make things happen, and are willing to do more."