Byju’s Adopts Revenue-Linked Salary Structure For Employees- Check Details (image source: Today Technology Market ResearchDigital)
Byju’s, the troubled ed-tech firm, has introduced a new policy linking sales staff salaries to the revenue they generate weekly. This initiative was adopted by the company to navigate cash shortages while incentivizing sales performance amidst operational hurdles, as per A TOI report.
Implementation of Revenue-Linked Salary Structure
Byju’s decision follows the partial payment of salaries for February and March, amidst prolonged delays. The new policy, applicable to the Inside Sales (IS) and Byju’s Exam Prep (BEP) teams, directly ties a percentage of weekly revenue to employees’ earnings. Effective from April 24, the policy spans four weeks until May 21, aiming to motivate sales staff during the critical sales quarter of April, May, and June.
Payment Dynamics and Suspension of Base Salaries
Under the revised system, sales associates will receive 50 per cent of the weekly revenue they generate, disbursed at the end of each seven days. However, Byju’s has temporarily suspended base salaries for sales team associates during this period. Employees failing to contribute to revenue generation for a given week will not receive any payout or salaries.
Variable Payouts and Performance Expectations
Byju’s outlines that payout percentages will vary based on factors such as individual revenue generation, designation, and the number of sales associates within each team. Additionally, managerial staff face performance expectations related to sales team retention, influencing their payout levels.
Impact and Employee Concerns
While the revenue-based salary model aims to provide timely payouts and maintain financial stability for sales associates, it also raises concerns among employees. The transition from fixed salaries to performance-based earnings introduces uncertainty and heightened pressure to meet revenue targets.
Company Response and Financial Context
Byju’s justifies the initiative as a strategic measure to ensure employee financial security amidst operational adjustments. However, it comes amidst reports of fund shortages, with the company’s founder resorting to personal debt to meet payroll obligations. Furthermore, legal disputes and layoff initiatives add to Byju’s mounting challenges.
Ongoing Challenges and Mitigation Efforts
Byju’s facing hurdles, including legal battles, layoffs, and investor departures, amidst funding constraints and operational constraints. While attempts have been made to address some issues through capital infusions and leadership changes, the company continues to explore options such as asset divestments to alleviate financial strain.
