Christmas party: Bonuses seen hitting 200%
NEW DELHI/KOLKATA: With economic recovery well on its way, companies are again getting ready to open their purse strings and pamper employees with Christmas and New Year bonuses and goodies.
Top companies across sectors — FMCG, consumer durables, IT, financial services, pharma and automobiles — are providing, not just generous payouts around this time but also showering employees with gifts, offers of free holidays or even flying in overseas employees so they can spend the holiday season with their families. It’s a way to both reward and retain their top performers. Companies like Dabur, LG Electronics, Samsung, Haier, Mahindra Satyam, Hyundai Motor India and Angel Broking, among others, have decided to pull out all stops this year.
Dabur is paying a 20% bonus to its 1,500-odd employees covered under the Payment of Bonus Act. The company’s performance-linked payout is made in April, when other employees also get bonuses. “We have kept the bonus the same for each for our employees in this category,” says Dabur India ED-HR A Sudhakar. The company has about 5,000 employees across its global operations.
Consumer durables firm Samsung will declare its bonus for 2010 early next month. Last year, the company had declared a bonus of 200% of the basic salary for employees, so this year they are expecting something similar. Their competitor, LG Electronics, paid a special bonus to employees in November — following a stellar Diwali performance — when sales grew by 40%. LG’s special bonus payout was equivalent to 200% of an employee’s monthly basic salary. This, in addition to the usual pre-Diwali bonus it provides employees in October, which works out to 300% of their basic salary. The quarterly bonus payout will be in January, based on October-December performance.
Chinese firm Haier Appliances, too, is planning to dole out year-end bonuses in January. This would be company’s annual performance-linked variable payout, and Haier India’s director (human resources), Sandeep Tyagi, says it could be as high as 130% of an employee’s variable salary.
Drug major Dr Reddy’s Lab also plans to provide performance incentive to its sales team around the New Year, and this could vary from 10-50% of a person’s salary, based on the performance of the company during the third quarter, says HR head Saumen Chakraborty.
In the auto sector, which has seen sales zooming over the last few months, Hyundai Motor plans to pay a bonus in the first quarter of 2011. Although the company spokesperson did not reveal the amount, a senior official said the bonus payout is usually more than a month’s salary.
Apart from monetary incentives, some companies are also looking at new ways to reward employees. Angel Broking, for instance, plans to offer its top performers a four-five day holiday to destinations like Thailand, Malaysia and even Switzerland with their spouse. The rest of its 6,500 employees will get the annual performance-linked incentives just before Christmas, which averages 10-15% of an employee’s gross salary, and may even go as high as 20-25%. “This is the first time we are testing non-monetary incentives as a way to improve employee morale and motivation,” says Angel Broking senior VP (HR) Dhruv Desai.
IT firm Mahindra Satyam plans to bring its top deck of 20-odd employees stationed abroad back to India so that they can enjoy the year end with their families. “It will be a homecoming for them, and give them a chance to recharge before the New Year and fresh business starts to flow in,” says Mahindra Satyam chief people officer T. Hari. “Since employees are always tired by the year-end, rewards like free holidays helps to refresh them, so that they can start the new year with a bang,” feels Essar Group president (HR) Adil Malia.
Adds Aon Hewitt’s principal (rewards), Sandeep Chaudhary: “The Indian economy has witnessed a definite resurgence over the past three quarters. Many sectors and organisations have performed above budget, hence bonus payouts for 2010 have a positive projection over 2009.”
Still, monetary incentives remain the perennial favourite with employees, regardless of all the new ‘rewards’ on offer. “Money is the one language that everybody understands,” says Rajiv Jain, head (home appliances) at LG India, who used his bonus to upgrade the gadgets at home. “Wish we could have both bonus and gifts,” says Anjali Sen, a sales executive working with a leading MNC pharma company, which has announced non-monetary incentives like free holidays, mobile phones and laptops based on performance.
“True, that is something which may be not practical, but we can always hope,” she says. Indeed, if the year-end trend this time is so positive, employees can certainly expect a happier summer bonus during the annual increments cycle in April-June next year.
Top companies across sectors — FMCG, consumer durables, IT, financial services, pharma and automobiles — are providing, not just generous payouts around this time but also showering employees with gifts, offers of free holidays or even flying in overseas employees so they can spend the holiday season with their families. It’s a way to both reward and retain their top performers. Companies like Dabur, LG Electronics, Samsung, Haier, Mahindra Satyam, Hyundai Motor India and Angel Broking, among others, have decided to pull out all stops this year.
Dabur is paying a 20% bonus to its 1,500-odd employees covered under the Payment of Bonus Act. The company’s performance-linked payout is made in April, when other employees also get bonuses. “We have kept the bonus the same for each for our employees in this category,” says Dabur India ED-HR A Sudhakar. The company has about 5,000 employees across its global operations.
Consumer durables firm Samsung will declare its bonus for 2010 early next month. Last year, the company had declared a bonus of 200% of the basic salary for employees, so this year they are expecting something similar. Their competitor, LG Electronics, paid a special bonus to employees in November — following a stellar Diwali performance — when sales grew by 40%. LG’s special bonus payout was equivalent to 200% of an employee’s monthly basic salary. This, in addition to the usual pre-Diwali bonus it provides employees in October, which works out to 300% of their basic salary. The quarterly bonus payout will be in January, based on October-December performance.
Chinese firm Haier Appliances, too, is planning to dole out year-end bonuses in January. This would be company’s annual performance-linked variable payout, and Haier India’s director (human resources), Sandeep Tyagi, says it could be as high as 130% of an employee’s variable salary.
Drug major Dr Reddy’s Lab also plans to provide performance incentive to its sales team around the New Year, and this could vary from 10-50% of a person’s salary, based on the performance of the company during the third quarter, says HR head Saumen Chakraborty.
In the auto sector, which has seen sales zooming over the last few months, Hyundai Motor plans to pay a bonus in the first quarter of 2011. Although the company spokesperson did not reveal the amount, a senior official said the bonus payout is usually more than a month’s salary.
Apart from monetary incentives, some companies are also looking at new ways to reward employees. Angel Broking, for instance, plans to offer its top performers a four-five day holiday to destinations like Thailand, Malaysia and even Switzerland with their spouse. The rest of its 6,500 employees will get the annual performance-linked incentives just before Christmas, which averages 10-15% of an employee’s gross salary, and may even go as high as 20-25%. “This is the first time we are testing non-monetary incentives as a way to improve employee morale and motivation,” says Angel Broking senior VP (HR) Dhruv Desai.
IT firm Mahindra Satyam plans to bring its top deck of 20-odd employees stationed abroad back to India so that they can enjoy the year end with their families. “It will be a homecoming for them, and give them a chance to recharge before the New Year and fresh business starts to flow in,” says Mahindra Satyam chief people officer T. Hari. “Since employees are always tired by the year-end, rewards like free holidays helps to refresh them, so that they can start the new year with a bang,” feels Essar Group president (HR) Adil Malia.
Adds Aon Hewitt’s principal (rewards), Sandeep Chaudhary: “The Indian economy has witnessed a definite resurgence over the past three quarters. Many sectors and organisations have performed above budget, hence bonus payouts for 2010 have a positive projection over 2009.”
Still, monetary incentives remain the perennial favourite with employees, regardless of all the new ‘rewards’ on offer. “Money is the one language that everybody understands,” says Rajiv Jain, head (home appliances) at LG India, who used his bonus to upgrade the gadgets at home. “Wish we could have both bonus and gifts,” says Anjali Sen, a sales executive working with a leading MNC pharma company, which has announced non-monetary incentives like free holidays, mobile phones and laptops based on performance.
“True, that is something which may be not practical, but we can always hope,” she says. Indeed, if the year-end trend this time is so positive, employees can certainly expect a happier summer bonus during the annual increments cycle in April-June next year.
CAclubindia
