HR Policy Manual Compensation Policy on Performance

Linked Pay / Variable pay/Commission

Objective:

The objective of this policy is to provide guidelines on payment of Performance

Linked Pay at L1-L4 and equivalent levels and Variable Pay/Commission at L5-
L9 and equivalent levels.

Scope:

This Policy applies to all employees at L1-L9 and equivalent levels.

Methodology and Payouts:

1. Performance Linked Pay for L1-L4 and equivalent levels:

a. 10% of the CTC of employees at L1-L4 will be eligible for

Performance Linked Pay.
b. The 100% of weightage will be based on the individual performance
ratings.
c. The Payout of PLP will be based on individual’s performance rating.
At “A” Rating, the payout will be at 125% of the PLP for the year. At
“B” Rating, the payout will be at 100% and at “C” rating, the payout
will be at 70%.

2. Variable Pay/Commission for L5-L9 and equivalent levels:

a. 15% of the CTC of employees at L5-L9 will be eligible for

Performance Linked Pay as per table below:
i. Variable Pay/Commission for Corporate and Manufacturing
Locations
Level Individual Rating Department Rating Company Rating
L5-L7 60% 30% 10%
L8-L9 50% 30% 20%

ii. Variable Pay/Commission for Regions

Level Individual Department Rating Region Rating Company
Rating Rating
L5-L7 60% 10% 20% 10%
L8-L9 50% 10% 20% 20%

b. Individual Rating: The Variable Pay will be based on individual’s

performance rating as below:
i. At “A” Rating: Payout will be at 125% of the Individual
Variable Pay Component.
ii. At “B” Rating: Payout will be at 100% of the Individual
Variable Pay Component.
Section II: Compensation Guidelines TITAN Company Limited

Controlled Copy: For Internal Circulation Only: Version No: 3.1: Issue Date: 27.04.2017
HR Policy Manual Compensation Policy on Performance
Linked Pay / Variable pay/Commission

iii. At “C” Rating: Payout will be at 70% of the Individual

Variable Pay Component.

c. Department Rating: The payout will be based on the Departments

performance and its rating where the employee has spent large
part of the year. For details refer point 3 of this Policy document.
d. Regional Rating: The payout will be based on the Regions
performance and its rating where the employee was based for large
part of the year. For details refer point 4 of this Policy document.
e. Company Rating: The payout will be based on the overall
Company’s performance during the financial year.

3. Parameters for Department Ratings

a. Line functions: 65% of the weightage will be for Business

Performance
i. 25% weightage for Sales achievement
ii. 25% weightage for PBT achievement
iii. 15% for Customer Experience/Engagement
b. Support functions: 65% of the weightage
i. 50% of the weightage on achievement of committed plans
and impact of initiatives
ii. 15% of weightage on Customer Index
c. 15% of the weightage on People
d. 20% of the weightage on Initiatives and Innovations undertaken by
the Department

4. Parameters for Regional Ratings

a. 50% weightage for Business Performance – Sales growth of the

Region.
b. 50% weightage for Initiatives and Innovations by the Region.

5. General Guidelines

a. At “D” Rating the employee will not be eligible for any PLP/ Variable
Pay.
b. Any Loss of pay suffered by the employee will be proportionately
deducted from the Payout.
c. Employees who joined during the course of the year will be paid
PLP/ Variable Pay proportionately for the period they worked during
the financial year.
st
d. Since, Employees who join after 1 Nov are not part of the PMS
Process, for that financial year, the PLP/ Variable Pay payout will

Section II: Compensation Guidelines TITAN Company Limited

Controlled Copy: For Internal Circulation Only: Version No: 3.1: Issue Date: 27.04.2017
HR Policy Manual Compensation Policy on Performance
Linked Pay / Variable pay/Commission

be added in the ensuing financial year and payouts will be based

on the performance rating of that year.
e. Employees in the Retail Stores, who are eligible for Prolip/ MSI or
Retail Incentives, will not be eligible for PLP/ Variable Pay payouts.
However, any employee who moves from retail store to other
functions and vice versa, will be eligible for PLP/ Variable Pay
Payout for the period they were in non-retail store functions.
f. Employees should have worked minimum six months during the
financial year to be eligible for Variable Pay/ PLP.

Deviations:

Any deviations from this policy require approval from the MD / CHRO.

Management reserves the right to modify or terminate this policy without prior
notice.
The above guidelines will be effective Financial Year 2016-17.

R. RAJNARAYAN
SENIOR VICE PRESIDENT & CHRO

Section II: Compensation Guidelines TITAN Company Limited

Controlled Copy: For Internal Circulation Only: Version No: 3.1: Issue Date: 27.04.2017