The unfavorableeconomic view specifies that rarer establishments will hand out bonuses eachyear, according to HR experts. But, it is an obligation to pay bonus to the unionizedstaff, a minimum of 8.33% and maximum 20% on the basic salary.
Giving Diwalibonus is more prevalent in the manufacturing segment but the concept is graduallygetting replaced by performance incentives in other sectors. Company’s give bonus during the year insteadof Diwali Bonus is required to be paid as per the law each year, whichis related to the remunerations. The regulation states that establishments haveto announce bonus, which is a minimum of 8.33% to maximum 20% on the basicsalary as well as Dearness Allowance (DA). We persons call Diwali expenses isalso called extra or additional payment. Some companies don’t give thisadditional payment during Diwali period but during the year.
It is better not to give incentivesduring festivities. The Diwali bonus exercise is not applicable to theMNCs.Whatever incentives are given is performance-based.
As we want to maintainsecularism within our company, the incentives are specified mostly two monthsbefore 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 formof sweets and chocolate packets. The remunerations and bonus are anyway basedon the returns. To maintain a materialistic atmosphere at the workplace, it isbetter not to give incentives during festivities.The percentage of bonusacknowledgedevery year varies in the industrial sector, the annual festive(Diwali) bonus legacy remains to be powerfully followed as per the governmentrules.
The festive bonus not only acts as an incentive for the staff, it also indicatesour confidence as owners in the workforce. Unlike the IT sector, themanufacturing sector still strongly believes in the bonus culture. May be there is a slight flip-flop in theeconomic cycle this time of the year in the automotive sector, but by the endof 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 thelaw. The percentage of bonus declared every year differs from 8-20% as it isperformance-linked. We have to show the bonus figure in the company’s balancesheet. In the manufacturing sector, there is no other option as it is a setpractice to declare Diwali bonus.
They don’t give bonus but have incentives whichare declared during the year. Even in IT sector, the incentives are declaredhalf-yearly or quarterly. The concept of bonus is progressively replaced byperformance incentives, which is paid on a quarterly basis.
As for the unionized workforce, the law of the land applies and the bonusconcept still exists. The unionized workforce is governed by separatecode of conduct and they still get the Diwali bonus every year as per theguidelines. The executive cadre do not come under the unionised workforce. Tillfew 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 thepractice of giving gifts, however, not in cash but kind. Nowadays, especiallythe IT companies, focus more on paying according to the performance. Companieshave quarterly or half-yearly reviews after which they declare incentives,which differ from employee to employee.
So finally on the above matter everycountry has developed a set of regulations for the management of humanresources, so the HRM practices have to be designed or modified according tothese regulations and returns of the organization.