Ulla Mensah· Head of Reward, Bellwether Consulting
Posted in São Paulo Chapter ·
We are about to open PLR negotiations with the employee commission and the union for next year's plan, and inflation has made the usual targets hard to defend. Our plan pays up to 2.4 salaries, half on company EBITDA and half on unit indicators, and the EBITDA target was set in nominal reais.
This year nominal revenue grew while margin fell, and the plan will pay about 1.3 salaries. Employees see prices rising and a smaller payout, and they are not pleased. I am considering proposing real-terms targets, or a margin measure in place of nominal EBITDA. What have other employers here agreed with their commissions?
0 reactions · 4 replies · 5 views
Samir GrantCEP, CSI
Head of Reward, Vantage Telecom
We moved to EBITDA margin in 2023 and kept one nominal indicator, net revenue, at 20 percent weight. The commission accepted it because we showed three years of back-testing in which the old and new designs paid within 0.2 salaries of each other. If you cannot show that the change is neutral on average, expect it to be read as a cut.
Samir GrantCEP, CSI
Head of Reward, Vantage Telecom
Be careful about changing indicators to rescue a low payout. Our labour counsel is strict that PLR rules need to be clear, objective and agreed in advance for the plan to keep its treatment, and that anything resembling a discretionary top-up after the fact puts that at risk. We left the low payout alone and dealt with pay through the collective agreement increase.
Samir GrantCEP, CSI
Head of Reward, Vantage Telecom
Industrial company in the interior of the state, about 6,000 employees. Our union asked for a guaranteed minimum of 0.8 salary whatever the results. We refused the guarantee but agreed a lower threshold: payout starts at 85 percent of target, where it used to start at 92. In a volatile year the starting point matters more to employees than the ceiling.
Samir GrantCEP, CSI
Head of Reward, Vantage Telecom
Have you looked at the split between company and unit indicators? Ours was 50 and 50 like yours, and operations people felt punished for margin pressure they could not influence. We changed to 30 company and 70 unit for non-management, with safety, quality and productivity measures. Payout variance between units rose, which we had to explain carefully.
