This policy is effective from 1st January 2026 and applies to all full-time employees with variable or performance-based pay in their compensation structure.
What is the variable component?
- Variable Pay / Bonus: Refers to the quarterly performance-linked incentive component of total compensation
- KRA (Key Result Areas): Quarterly performance goals assigned to employees.
- PIP (Performance Improvement Plan): A formal performance management process initiated due to underperformance.
- Notice Period: Contractual notice duration required to be served upon resignation or termination.
- Dependent Role: A role identified by management as critical for business continuity, client delivery, or transition stability.
When will the component be calculated?
- Bonus will be paid at 100% of the eligible variable component, irrespective of quarterly KRA achievement.
- Bonus payout will be made as per the defined payout schedule (currently half-yearly in August and January of every year).
KRA achievement will continue to be measured for performance management, appraisal, and growth purposes, but it will no longer directly impact bonus payout percentages.
Eligibility Criteria
An employee will be eligible to receive 100% of the quarterly bonus subject to the following conditions:
1. Active Employment
- The employee must be on active payroll on the bonus payout date.
2. Notice Period Completion
- Employees who resign must serve their full contractual notice period.
- Employees will not be eligible for a bonus if:
- They do not complete their full notice period or abscond or do not complete handover of their responsibilities
- They are released early at their request
If the employee serves the full notice period as per the contract, they will be eligible for the full bonus payout.
3. Performance Improvement Plan (PIP)
- Employees who are under a formal PIP at any time during the applicable bonus period will not be eligible for variable pay for that period. For example, if an employee is put on PIP for two months, they will forfeit two months of variable pay.
- Eligibility will resume once the employee successfully exits the PIP and is restored to good standing.
4. Termination
- Employees terminated for cause or misconduct will not be eligible for a bonus for the applicable period.
- In cases of involuntary termination without cause, management reserves the discretion to determine bonus eligibility.
Intent of Policy
A lot of questions came about as to why we moved from performance-based incentives to this new structure. The reason for doing so was to delink performance and pay. Countless studies have shown that performance-based pay actually reduces outcomes and is counterproductive. Especially in strategic or creative roles.
With this new structure, we intend to:
- Promote stability and retention
- Encourage experimentation without the worry of losing out on any pay
- Encourage responsible exit planning
- Provide predictable and equitable bonus payouts
- Maintain accountability through performance management systems separate from bonus payout
Management Discretion
The company reserves the right to:
- Amend, interpret, or withdraw this policy at its discretion
- Exercise discretion in exceptional business circumstances
- Clarify eligibility in ambiguous cases