The annual team award used in twelve shops paid nothing below 100% of sales plan and ₹12,000 at or above it. For three hundred eligible adults, a very small difference around full plan could therefore create a large payment difference. In 2023 I brought a redesigned formula to the board with qualified reward and employment review, including a clear explanation of who could receive less as well as more.
The proposed formula paid zero at or below 90%, then ₹1,000 per percentage point above 90%, capped at ₹20,000 at 110%. At 98.8%, the new award would be ₹8,800 rather than zero. At 100.2%, it would be ₹10,200 rather than ₹12,000. Exactly 100% would produce ₹10,000, also below the old ₹12,000. Those examples made the tradeoff visible instead of describing gradual payment as an improvement for every participant.
The maximum annual envelope was ₹60 lakh: three hundred eligible people multiplied by the ₹20,000 cap. Board approval of that ceiling was not an actual payout, a profit result or evidence of improved retention. We needed managers to explain the calculation and the transition accurately, including what the scheme measured and the boundaries of the examples. This fictional award is separate from any conclusion about statutory bonus obligations.
I recommended the redesign because the previous cliff deserved scrutiny, while retaining responsibility for the choices inside the replacement. A smoother curve does not settle whether the performance measure or award level is appropriate. The result was an approved design and maximum envelope with explicit tradeoffs. The case demonstrates how a CHRO can make reward mechanics understandable before an attractive description conceals the experience of people whose payment may fall.