Hello everyone,

Am here to seek experts advise on an issue that is really giving everyone of us involved concerned.

I work in a service industry that provides a very important product to a vast numbers of customers within the industry.

Due to problems usually faced in getting revenue sales, the company adopted a performance based remuneration system recently that ensures that salaries are paid to employees based on what their stations makes as revenue vis-à-vis percentage of revenue generated against target given.

With this system in place, monthly salaries dropped drastically and pay day that usually ought to be a happy day for everyone now turned into a day of sadness because of unrealistic targets sets for everyone/stations upon which ones salaries are based on.

Recently, some months payslips were given to all staff, it was revealed that we no longer have a basic salary, assuming your monthly performance is 60%, every component of your salary will be paid on 60%. Should it be 40%, that means every component of your salary will be calculated based on 40%!

My question now is, in an environment where performance-based remuneration is in place, are basic salary and pension deductions also subject to performance? Pension deductions that should be our future is also subjected to monthly performance.

HR gurus in the house and folks familiar with performance-based remuneration, please share your thoughts on this.

CC. Mods, please do me a great help by kindly pushing this to front page.

Thanks

Modern day slavery

[quote author=infoblaster post=59240648]Hello everyone,

Am here to seek experts advise on an issue that is really giving everyone of us involved concerned.

I work in a service industry that provides a very important product to a vast numbers of customers within the industry.

Due to problems usually faced in getting revenue sales, the company adopted a performance based remuneration system recently that ensures that salaries are paid to employees based on what their stations makes as revenue vis-à-vis percentage of revenue generated against target given.

With this system in place, monthly salaries dropped drastically and pay day that usually ought to be a happy day for everyone now turned into a day of sadness because of unrealistic targets sets for everyone/stations upon which ones salaries are based on.

Recently, some months payslips were given to all staff, it was revealed that we no longer have a basic salary, assuming your monthly performance is 60%, every component of your salary will be paid on 60%. Should it be 40%, that means every component of your salary will be calculated based on 40%!

My question now is, in an environment where performance-based remuneration is in place, are basic salary and pension deductions also subject to performance? Pension deductions that should be our future is also subjected to monthly performance.

HR gurus in the house and folks familiar with performance-based remuneration, please share your thoughts on this.

CC. Mods, please do me a great help by kindly pushing this to front page.

It means your pension will not be fixed so is your tax. Look for another job. Those people are stupid

It is actually a very good thing.....I'll be back later to tell you how I do it in my company

happy birthday to my kid bro

With this system in place, monthly salaries dropped drastically and pay day that usually ought to be a happy day for everyone now turned into a day of sadness because of unrealistic targets sets for everyone/stations upon which ones salaries are based on. Eehya, sorry to hear this

made it, first page

hmmm...yam pepper scatter scatter

It's simple if you want your salary to be high then perform high, at least other person meeting up or even over performing are not crying the way you are crying. This thing you are crying about is what the company has been crying all along when your station doesn't perform upto expected and company still pays every one their full salary, do you wonder where company gets money from to pay full salary even when you guys dont do anything. Companies are becoming wise, if you can't deal then move on

11111

Just visualize yourself as a bricklayer who's paid according to the number of bricks he lays. No good pay and no pension. I think this is really a bad way for companies to compensate workers and it definitely reduces motivation in the workplace. To increase work rate I think your company should have adopted a profit sharing performance remuneration system which doesn't affects your basic salary but compensates for work output. Bro if your company adopts this system for a long time then it's better you runaway( that is if you have a better option o to avoid story that touch).

Haa in this Era were businesses are going nosedive due to incompetent administration that cannot stable the economy of a nation, My company should not try it with me. That's why is good to have a side business

Sorry

Modern day slavery. Do you think the company is being sincere?

I don't have any thing to say... But I hope that when you guys achieve 150% of your target, your salary will reflect that....

Sales/Marketing gurus appreciate this form of remuneration more.

Everybody is trying to stay a float.


As a firm would continue to pay a Staff who is not adding any value?

Ask google

What does your contract say?

Slavery. Another Behind name for working on commission basis. God punish bulharry

Benjom:
Sales/Marketing gurus appreciate this form of remuneration more.

Yes ooooo...

E dey sweet baje

crunchyg:
It's simple if you want your salary to be high then perform high, at least other person meeting up or even over performing are not crying the way you are crying. This thing you are crying about is what the company has been crying all along when your station doesn't perform upto expected and company still pays every one their full salary, do you wonder where company gets money from to pay full salary even when you guys dont do anything. Companies are becoming wise, if you can't deal then move on

Quick question. When the staff exceed performance let's say 200%, will management pay the staff 200% on their monthly emoluments?

This is what quite a few firms are considering presently in the face of dwindling sales revenue, uncertain economic environment and a way of ensuring that sales targets which ensure growth and sustenaibility in a way are met. The challenge has been issues which you have raised. I'll try and give an opinion or two.

1. There may be need to determine base pay which is what is earned target or no target met. The problem usually is that a firm that has not been operating that style of base pay is faced with the change being introduced and how to manage it. There is also the issue of reversing to a base pay system which can, to say the least, be demotivating.

2. How do you adjust pension related matters. Calculations for pension are based on total emoluments. Does it mean this will be moving up or down like a yoyo. The tax authorities too will raise an eye brow when they see monthly returns with same staff outlay being different for different months.

3. It may be safe to say that the system should start from core revenue generating persons and gradually spread across the whole firm where thorough measurement and evaluation techniques that is agreed by all concerned are adopted to arrive at the base pay and qualitatively and quantitatively define desired performance and how it is rewarded... Hence performance base pay.

4. You could also adopt a firm wide base pay system and agree on performance bonuses earned as a direct proportion of time defined targets. This can be paid out at the end of every agreed period. The challenge is how that pay out is arrived at as sales team tend to argue they are Frontliners in sales and revenue target accomplishments.

Take time to discuss as much as possible with the teams so everyone is on same page, as much as possible, the success of this change implementation is crucial as it involves the people who actually make the business happen.

ismokeweed

It's not a new thing, you will get use to it, just restrategize to be in the 70-100% band to be assured of good pay.

Cost reduction is a target given to someone to help company make money and salary reduction is part of that.

airsaylongcon:


Quick question. When the staff exceed performance let's say 200%, will management pay the staff 200% on their monthly emoluments?

Why won't they, if the performance can be measured, then the renumeration can also be measured in this case. This is just like the case of marketers working in commission, your performance determines what you get

I assume you are in the marketing department? Or business development, as some will like to call it. What is the HR Policy of your company? In your appointment letter, was there no section where your basic salary was mentioned? You guys can sue, you know.

wolesmile:
I assume you are in the marketing department? Or business development, as some will like to call it. What is the HR Policy of your company? In your appointment letter, was there no section where your basic salary was mentioned? You guys can sue, you know.

And you think companies doesn't have right to change policy if the old policy is not favouring them, Oga the recession in the land has caused a lot of restructuring in companies in order for them to survive

airsaylongcon:


Quick question. When the staff exceed performance let's say 200%, will management pay the staff 200% on their monthly emoluments?

Nope.

The max you get is 100%, meeting 200% of your target is a waste to you in that month, so you have to strategize such that you meet 100% of your target every month.

Exceeding your target this month won't get the excess rolled over into the new month. At lest that is how it works where I am.

Interesting...
From learning, when we talk about best practices, it is believed that it is a practice that an organization feels is best for them without going against any labor law.
As long as an organization is not going against the law, it is either the employee agrees to the new policy or resign from it.

Another part to this is the contractual agreement that you guys have gone into, due process must be followed to effect this change. Either to retire the entire staff with notice and within those notice period the company drafts another letter effecting the new salary structure.

The interesting part for me though is the unstable tax part which doesn't expressly concern the government as long as tax is paid on what you earn (PAYE).

This also means as mentioned by someone earlier that pension and NHF and NHIS payment would be unstable.

Listen to this employers in the house:
For me, this kind of policy may bring results in the mean time but it usually doesn't last.
It is not sustainable, and can actually impede growth, loyalty, devotion and commitment among employees.

Usually, when people start meeting their targets, it cost the company more to pay the remuneration or earnings and may have to revert back to basic monthly salaries.