Performance-based pay on the rise - 24 Nov 2008

Performance-based pay on the rise

Corporates want to attract and retain high impact employees

By Harsha Pramod @ Tuesday, November 25, 2008 8:10 AM

A study by HR consultancy firm Mercer says that the corporate sector in India is moving towards a differential salary structure based on performance.

According to the Mercer study, Compensation Practices in India 2008,
most companies are increasingly linking pay rises to performance,
rewarding the top-performing employees. Corporates are now focusing on
a package that includes benefits such as a better learning experience,
exposure to new projects and work environment rather than focusing only
on salaries and other monetary benefits.

With experts predicting a 15 per cent increase in salaries in 2008
in India, HR leaders are looking for effective compensation tools to
attract suitable talent, while balancing workforce productivity and
optimising compensation budgets.

The report studied 70 MNCs and aims to shed light on the ways in
which these companies deal with compensation. It also discusses best
practices which could be adopted by other companies. According to the
study, corporates are trying to attract, retain, engage and develop
high impact employees who can sustain business over the long term.

According to Mercer, the report will help corporates in India
identify differences between a company's Indian compensation practices
and the market norms. It would also enable them to enhance or redesign
their current compensation policies and programmes and provide clearer
direction and vision on  paying Indian employees. X