My management does not want to provide an annual increment every year. However, if there is a good performer, what will be the reply for them as an HR Executive?
Again, if an annual increment is permitted for any year, management does not want to provide an increment to all employees. They do not want to adjust inflationary adjustment. What will be the HR response?
From Bangladesh,
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2Again, if an annual increment is permitted for any year, management does not want to provide an increment to all employees. They do not want to adjust inflationary adjustment. What will be the HR response?
From Bangladesh,
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I think we need to clearly distinguish annual increment from inflationary adjustment of salary. The inflation adjustment is done through DA and is generally revised two to four times in a year depending on the change in the base Consumer Price Index. Increment is a reward given annually for the satisfactory service given during the previous appraisal period.
Whereas in Governmental setup, 'Increment is a predefined uniform quantum for each salary grade, drawn as a matter of course and is withheld on specific orders/spelt out reasons.' In the Private Sector, increment is variable and is not granted to all. To those denied the annual increment, HR has to be ready with a reply giving the unsatisfying nature of performance and the company expectations from the employee concerned.
From India, Mumbai
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Whereas in Governmental setup, 'Increment is a predefined uniform quantum for each salary grade, drawn as a matter of course and is withheld on specific orders/spelt out reasons.' In the Private Sector, increment is variable and is not granted to all. To those denied the annual increment, HR has to be ready with a reply giving the unsatisfying nature of performance and the company expectations from the employee concerned.
From India, Mumbai
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In addition to what KKHR said, annual increment is linked to performance. The quantum of it or the denial of it needs to be based on an objective evaluation of the employee's performance by the reporting authority or the appraisal committee. This is often followed by a discussion between the employee and their supervisor or the Appraisal Committee. It should not be subject to subjective considerations or whims and fancies of the management.
For this, you need to have a proper Performance Management System (PMS) in place.
B. Saikumar HR & Labour Relations Advisor Navi Mumbai
From India, Mumbai
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For this, you need to have a proper Performance Management System (PMS) in place.
B. Saikumar HR & Labour Relations Advisor Navi Mumbai
From India, Mumbai
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Hi!
Yearly increases of salaries must always be within the context of the company's salary structure and must comply with the compensation principle of "affordability and sustainability" to ensure that "distortion" will not happen. Moreover, to avoid favoritism and ensure equity, salary increases must be based on the results of the company's annual performance appraisal system.
One good tool for the annual adjustment of salaries is the so-called "Rainbow Chart".
My company helps set up these things in business organizations worldwide. Contact us if you have a budget for external consultants.
Best regards.
From Philippines, Parañaque
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Yearly increases of salaries must always be within the context of the company's salary structure and must comply with the compensation principle of "affordability and sustainability" to ensure that "distortion" will not happen. Moreover, to avoid favoritism and ensure equity, salary increases must be based on the results of the company's annual performance appraisal system.
One good tool for the annual adjustment of salaries is the so-called "Rainbow Chart".
My company helps set up these things in business organizations worldwide. Contact us if you have a budget for external consultants.
Best regards.
From Philippines, Parañaque
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Dear Friend,
There is nothing wrong if your workforce agrees to work without a yearly increment. Furthermore, if your management is capable of managing the show without providing annual increments, it is an addition to profit. Rewarding, promoting, or giving increments to good or talented people does not fall under the category of annual increment. The annual increment is given to workmen to compensate substantially for the cost of living influenced by the hike in the price index.
From India, Mumbai
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There is nothing wrong if your workforce agrees to work without a yearly increment. Furthermore, if your management is capable of managing the show without providing annual increments, it is an addition to profit. Rewarding, promoting, or giving increments to good or talented people does not fall under the category of annual increment. The annual increment is given to workmen to compensate substantially for the cost of living influenced by the hike in the price index.
From India, Mumbai
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Dear Prabhat,
There is a difference between compensating for the inflationary effect and compensating for the contributions made by an employee to the value of business and productivity of the company. The inflationary effect is taken care of by the Dearness Allowance formula based on CPI points once in a quarter/half-year, depending on the industrial practice sector-wise. Annual increment or rewards or incentives, by whatever name you call it, are not linked to CPI but to the performance for a year of an employee, though the assessment period may vary.
B. Saikumar HR & Labour Relations Advisor Navi Mumbai
From India, Mumbai
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There is a difference between compensating for the inflationary effect and compensating for the contributions made by an employee to the value of business and productivity of the company. The inflationary effect is taken care of by the Dearness Allowance formula based on CPI points once in a quarter/half-year, depending on the industrial practice sector-wise. Annual increment or rewards or incentives, by whatever name you call it, are not linked to CPI but to the performance for a year of an employee, though the assessment period may vary.
B. Saikumar HR & Labour Relations Advisor Navi Mumbai
From India, Mumbai
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