Vybhav has a different variable compensation for each of its four business units. The nature of business determines the percentage of variable pay as shown below:

All team-based incentives and individual incentives for senior managers are paid annually and all individual based incentives are paid quarterly. The actual payout happens in the payroll of the month preceding the quarter/year end. As part of the annual KRA setting exercise which happens in the first month of the fiscal year, the team as well as individual targets/results are frozen and signed off in the Perf-Perfect tool. All incentive payouts are closely linked to the KRA’s that were set out at the beginning of the year. At mid-year appraisal reviews the KRAs that can be reviewed by the manager along with inputs from the skip-level manager and changes made to KRA’s, if any. KRAs could be revised upwards to increase targets based on performance in the first half of the year or revised downward to reduce targets due to market/economic trends. Performance on KRA’s in the Perf-
Perfect tool is the only criterion for incentive payouts.
For team based incentives, there is a separate set of division and team results that form the basis for incentive payout—multiple key metrics like revenue numbers for the division, customer satisfaction scores, quality and cost efficiency metrics. The criteria for team based incentives have a similar framework across divisions, which act like a unifying force across Vybhav divisions and speak to its vision and values. All team-based incentive metrics are revised by Vybhav leadership team at the beginning of the year before it is signed off as final. Any changes are once again placed for review of the leadership team before it can be changed.

Questions
1. Comment on the variable pay package of Vybhav.
2. Discuss in groups of five, what could be the components for team-based pay for the

(a) Consumer Electronics Division of Vybhav

(b) Retail Division of Vybhav

(c) Telecom Services Division of Vybhav.

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IT Services *60% - 10% Individual Incentives *60% -30% For client facing teams (executing work directly for the client both off-shore and on site) *20% - 10% for support teams like HR, finance, IT Help Desk, marketing and presales. Retailing *Team based incentives *40% - 10% individual incentives for senior management roles only *20% - 10% for support teams like HR, finance IT Help Desk, marketing and presales Consumer Electronics *Team based incentives * 30% - 10% variable individual incentives *50% for senior management roles *20%-10% for support teams like HR, finance IT Help Desk, marketing and presales Telecom Services *Team based incentives 30%-20% individual incentives *20% - 10% for support team like HR, IT Help Desk, finance, marketing and presales