Performance-linked incentives
A performance-linked incentive (PLI) is a form of incentive from one entity to another, such as from the government to industries or from an
Open-ended incentives are normally applicable to revenue-generating activities (e.g., sales, production, efficiency, competitiveness, etc), while close-ended incentives are associated with quality improvement or support functions (e.g., operations, human resources, administration, etc.)
Method of calculating PLI
Also, in calculating PLI, only the performance and not the potential of the recipient is considered. Potential of the recipient is normally subjective and can be contested. PLI is based on metrics which are absolutely objective and clearly perceived as fair by both the PLI provider and the recipient.
Government to Industry PLI schemes
PLI schemes can be applied in various other scenarios. One common scenario is government's PLI scheme to boost or transform the specific sectors of the industry, trade or commerce. Government's incentives to industry are of diverse types, such as government
Employer to employee PLI schemes
PLI and Appraisal
Appraisals, normally conducted half-yearly or annually, are used to decide on the salary increments and promotions of the employee. These, being permanent increases, take both the performance and potential of the employee into account.
PLI's comparison with other benefits
PLI vs Salary
Salary is paid for the efforts that one puts in and PLI is paid for the results. Salary is paid in short, definitive cycles (e.g., weekly, monthly, fortnightly etc.) while PLI is paid in a longer cycle of monthly, quarterly or half-yearly, yearly.
PLI vs Bonus
Bonus is paid for the performance of the organization while PLI is paid for the individual's performance. Bonus is normally paid yearly or half-yearly. This is normally paid as a percentage of one's salary, or as a fixed amount, of the employee's individual performance.
PLI vs Retention Bonus
Some organizations give a retention bonus which is payable for the period that an employee stays back in the organization. This is paid for the value added by the employee by virtue of mere presence and not necessary for the efforts or work output. Normally retention bonus is paid yearly or half-yearly which will incentivise the employee to stay back in the organization for the payment
See also
- Executive compensation
- List of single-digit salary earners
- List of largest sports contracts
- List of highest paid baseball players
- Medical specialties, includes salaries respectively
- Salaryman (Japan)
- Peak earning years
References
- ^ Explained: What is PLI scheme, and which sectors will be under it?, Indian Express, 8 Nov 2020.
- ^ a b c Cabinet Clears ₹ 26,000 Crore Scheme For Auto Sector To Boost Production, NDTV, September 15, 2021.
- ^ a b India doesn’t need speed breakers. Modi govt right to help automobile, telecom, The Print, 17 September, 2021.
External links
- 17 Things Explanation of salary requirements and how to establish these.