economic view specifies that rarer establishments will hand out bonuses each
year, according to HR experts. But, it is an obligation to pay bonus to the unionized
staff, a minimum of 8.33% and maximum 20% on the basic salary. Giving Diwali
bonus is more prevalent in the manufacturing segment but the concept is gradually
getting replaced by performance incentives in other sectors.
Company’s give bonus during the year instead
of Diwali Bonus is required to be paid as per the law each year, which
is related to the remunerations. The regulation states that establishments have
to announce bonus, which is a minimum of 8.33% to maximum 20% on the basic
salary as well as Dearness Allowance (DA). We persons call Diwali expenses is
also called extra or additional payment. Some companies don’t give this
additional payment during Diwali period but during the year.
It is better not to give incentives
during festivities. The Diwali bonus exercise is not applicable to the
MNCs.Whatever incentives are given is performance-based. As we want to maintain
secularism within our company, the incentives are specified mostly two months
before the appraisals are done relatively than giving them during the festivals.
However we have done away with festive bonus, we positively give it in the form
of sweets and chocolate packets. The remunerations and bonus are anyway based
on the returns. To maintain a materialistic atmosphere at the workplace, it is
better not to give incentives during festivities.
The percentage of bonus
every year varies in the industrial sector, the annual festive
(Diwali) bonus legacy remains to be powerfully followed as per the government
rules. The festive bonus not only acts as an incentive for the staff, it also indicates
our confidence as owners in the workforce. Unlike the IT sector, the
manufacturing sector still strongly believes in the bonus culture.
May be there is a slight flip-flop in the
economic cycle this time of the year in the automotive sector, but by the end
of the financial year, the situation will definitely improve. Come what may,
the bonus will be standing at 8.33%, which needs to be compulsorily as per the
law. The percentage of bonus declared every year differs from 8-20% as it is
performance-linked. We have to show the bonus figure in the company’s balance
sheet. In the manufacturing sector, there is no other option as it is a set
practice to declare Diwali bonus.
They don’t give bonus but have incentives which
are declared during the year. Even in IT sector, the incentives are declared
half-yearly or quarterly. The concept of bonus is progressively replaced by
performance incentives, which is paid on a quarterly basis.
As for the unionized workforce, the law of the land applies and the bonus
concept still exists.
The unionized workforce is governed by separate
code of conduct and they still get the Diwali bonus every year as per the
guidelines. The executive cadre do not come under the unionised workforce. Till
few years ago, there was a practice of giving bonus to those at managerial-level,
but now many companies have done away with the bonus culture.
Yes, during festivities like Diwali we follow the
practice of giving gifts, however, not in cash but kind. Nowadays, especially
the IT companies, focus more on paying according to the performance. Companies
have quarterly or half-yearly reviews after which they declare incentives,
which differ from employee to employee.
So finally on the above matter every
country has developed a set of regulations for the management of human
resources, so the HRM practices have to be designed or modified according to
these regulations and returns of the organization.