Synopsis—About two-thirds of major companies in the country, including ITC, PepsiCo and Maruti Suzuki, have handed out bonuses, variable payouts and incentives to their employees this year, despite the Covid-19 outbreak taking its toll on their businesses.
New Delhi: About two-thirds of major companies in the country, including ITC, PepsiCo and Maruti Suzuki, have handed out bonuses, variable payouts and incentives to their employees this year, despite the Covid-19 outbreak taking its toll on their businesses. An Aon survey of 1,050 companies across 22 industries, shared exclusively with ET, found that 67% of companies had paid bonuses for 2019-20 as per the actual business performance between May and November, despite 2020 being a challenging year, said Roopank Chaudhary, partner at Aon.
Apollo Tyres, Toyota Kirloskar Motor, Titan Company, Allied Blenders & Distillers, Whirlpool, Maruti Suzuki, PepsiCo and ITC confirmed to ET that they have paid bonuses and incentives, though some of them delayed payouts slightly due to the pandemic. However, overall variable pay as a percentage of total fixed pay has dropped for India Inc to 12% in 2020, from 16.1% in 2019, according to the survey. While 10.50% companies have deferred payouts, another 4.75% have frozen them, according to the Aon survey. Some 17.75% respondents are either yet to decide about giving payouts this year, are discreet about it, or are looking at different treatment across levels of management, it found.
Toyota Kirloskar Motor handed out performance bonuses to all its employees in mid-2020, along with annual increments, despite the auto industry being one of the worst affected by the pandemic, a company spokesperson said. “Even before the pandemic hit the world, the Indian auto industry was grappling with weak consumer sentiment, paired with a severe sales slump, and TKM was no exception,” the spokesperson told ET. Maruti Suzuki also released annual variable performance rewards to all employees in August. “Promotions were announced in September and all increments and bonuses were given as per our existing policies,” R Uppal, executive board member at the country’s top carmaker, told ET.
Allied Blenders and Distillers, the third-largest Indian made foreign liquor (IMFL) company, said its incentive payouts got pushed to July from May, but it handed them out to all employees except top leaders. “In all, 83% got performance incentives and 11% of employees got increments in a very challenging year,” said Biplob Banerjee, chief people officer at the Kishore Chhabria-owned distiller that makes Officers Choice whisky. “In a poll later, many said they had not expected this,” Banerjee said.
Apollo Tyres pays out variable in three tranches in a year. “As per the schedule, employees received their variable payout with November’s salary. This is the second payout for the financial year, after August,” said Sunam Sarkar, president and chief business officer, Apollo Tyres. Logistics startup Shadowfax Technologies also recently paid the variable salary component. “It has been a challenging year,” said Tanushree Ray, head, HR, Shadowfax. “We are offering quarterly bonuses to our sales teams – between 1-3x their variable component — which, despite the adverse circumstances, have exceeded their goals,” she said. “The performance-linked pay has all been paid out,” said Raj Narayan, chief HR officer, Titan Company. “The junior staff was paid in May, managers and above in June, and senior and top management in August.”