This pertains to Shyamal Majumdar’s “Polman’s salary formula” (April 2). Executive reward management is one of the most intricate and delicate responsibility of human resource management. It is intricate because motivation pulls of managers vary individually and according to their hierarchical levels. It is delicate because it has to balance achievement of organisational goals through rewarding capable performance within limits of the budget.
Right calibration of variable pay by linking it to fulfillment of business strategy provides the base of compensation strategy. If performance parameters for top management are derived from its chosen business strategy, it would bind their attainments with organisational thrust areas.
An organisation can design its compensation package by relating incentives at junior levels with individual performance and lower percentage of variable pay, and incentives at senior levels with team/corporate performance and high percentage of variable pay.
The lower share of variable pay in total salary is one the factors for the lack of competitive contribution by Indian managers.
Y G Chouksey, Pune
