India Inc took progressive incentive-based measures to attract and retain talent during pandemic: Mercer India study

India Inc has taken progressive incentive-based measures to attract and retain talent during the pandemic with 97% organizations having an active short-term incentive plan for in-year performance recognition, a Mercer India study said.

This study, titled leveraging incentives for competitive advantage, covered 41 organisations and represented over 300,000 employees across India and included sectors like consumer, chemicals, life sciences, IT services and Internet-based and e-commerce industries.

Further, the study revealed that employee retention and enabling wealth creation for employees were the most prevalent objectives of long-term incentives.


“However, new-age organizations and startups seem to be following differentiated practices, such as discretionary grants, ESOPs, appraisal-based grants etc. primarily for ring-fencing critical talent and providing liquidity to employees,” the study said.

According to Mansee Singhal, senior principal, Mercer India, there is a distinct correlation of the pay structure with the evolution of the organization.

“Ultimately, incentives should be based on the back of a clear, transparent process of individual and organizational performance assessment – failing this, even the most creative plan design will not yield the appropriate outcomes,” Singhal added.

As per the study, among performance-based short term-incentives the variable pay is largely determined by both the company’s and individual employee’s performance (88% and 82% respectively), the employee’s performance primarily defined the sales incentive payout to the tune of 71%.

“As is prevalent in most cases, revenue and profits were performance metrics determining variable payout, while commission-based and quota-based payouts were the most sought after sales incentives,” it added.