Hello, professionals. I want your perspective on annual salary increments in the IT industry. Although it's not mandatory, what are some ways to effectively manage a situation with no yearly increment? This is particularly relevant if a company that has been providing regular raises decides to halt all such activities.
I am looking forward to hear from you.
From India, Kochi
10I am looking forward to hear from you.
From India, Kochi
Hi,
Performance Appraisal is carried out in all Organisation to evaluate the performance of the employee for the period under review and to recognize the performance of the employee with Promotions / salary hike. Why your Organisation had decided to hold the Performance Appraisal process after providing regular hikes in the past years ? Is it due to the overall performance of the Organisation is not that good in terms of revenue or for any other reasons?. What so ever reason it may be, if you hold the appraisal process definitely there will be questions from employees and if the concerns of the employees were not addressed properly they will look for other job. Increments motivates and boosts the overall work efficiency of employee and it is basically a reward for their hard work. Especially when the cost of living is getting escalated day by day you can't expect the employee to work for same salary for long years.
In the absence of some convincing reasons for holding /delaying the increment process there should be some assurances at least as to when the performance review will be conducted. If not employees will start keep moving for other Organizations.
So Employer should take a call whether they require man power resources or not.
From India, Madras
Performance Appraisal is carried out in all Organisation to evaluate the performance of the employee for the period under review and to recognize the performance of the employee with Promotions / salary hike. Why your Organisation had decided to hold the Performance Appraisal process after providing regular hikes in the past years ? Is it due to the overall performance of the Organisation is not that good in terms of revenue or for any other reasons?. What so ever reason it may be, if you hold the appraisal process definitely there will be questions from employees and if the concerns of the employees were not addressed properly they will look for other job. Increments motivates and boosts the overall work efficiency of employee and it is basically a reward for their hard work. Especially when the cost of living is getting escalated day by day you can't expect the employee to work for same salary for long years.
In the absence of some convincing reasons for holding /delaying the increment process there should be some assurances at least as to when the performance review will be conducted. If not employees will start keep moving for other Organizations.
So Employer should take a call whether they require man power resources or not.
From India, Madras
Thank you Lakshmi Narayan for your insights.
The reason for holding is overall performance of the Organisation is not that good in terms of revenue. Despite my efforts, the management remains hesitant about offering salary increases, and there appears to be a pattern of discrimination, with raises being provided only to select employees. This situation seems indicative of a problematic workplace culture, which I aim to improve.
It's been suggested that money is the key language for the management, so I'd like to explore ways to persuade them to reconsider their stance. Moreover, I've learned that many employees are secretly considering resigning if they don't receive a pay raise, which is causing concern. The management, however, is firm in their belief that salary increases are not an entitlement and that poor performance is their reason for withholding them.
How can I navigate this situation more effectively? Any advice you can offer would be greatly appreciated.
From India, Kochi
The reason for holding is overall performance of the Organisation is not that good in terms of revenue. Despite my efforts, the management remains hesitant about offering salary increases, and there appears to be a pattern of discrimination, with raises being provided only to select employees. This situation seems indicative of a problematic workplace culture, which I aim to improve.
It's been suggested that money is the key language for the management, so I'd like to explore ways to persuade them to reconsider their stance. Moreover, I've learned that many employees are secretly considering resigning if they don't receive a pay raise, which is causing concern. The management, however, is firm in their belief that salary increases are not an entitlement and that poor performance is their reason for withholding them.
How can I navigate this situation more effectively? Any advice you can offer would be greatly appreciated.
From India, Kochi
Hi,
If less revenue is the reason for holding salary hike then it is fine. You need to explain the situation to the employees with some positivity that Company is anticipating some revenue in the coming months etc. But if pay raises are awarded to selective employees then it will an act of kindling the fire resulting in unrest among employees. So where ever possible ensure that hold is applicable for all employees.
With regard to your question how to navigate this question - it is a perplex situation. If the industry you belongs to is facing sluggishness universally then there might not be much opportunities outside and employees may wait for some time just for the sake of salary. But if the sluggishness is limited to your Organisation and if outside Market situation is bright then you cannot expect employees to be patient for very long time. But still through one to one or group discussions you may project a positive note that this is going to be a temporary situation etc.
If poor performance resulted in less revenue then identify the need for technical training and impart training / recruit employees with proper skills. Actually these analysis HR cannot do independently but you need to discuss with Head of the Departments and Location Head and take it up further.
From India, Madras
If less revenue is the reason for holding salary hike then it is fine. You need to explain the situation to the employees with some positivity that Company is anticipating some revenue in the coming months etc. But if pay raises are awarded to selective employees then it will an act of kindling the fire resulting in unrest among employees. So where ever possible ensure that hold is applicable for all employees.
With regard to your question how to navigate this question - it is a perplex situation. If the industry you belongs to is facing sluggishness universally then there might not be much opportunities outside and employees may wait for some time just for the sake of salary. But if the sluggishness is limited to your Organisation and if outside Market situation is bright then you cannot expect employees to be patient for very long time. But still through one to one or group discussions you may project a positive note that this is going to be a temporary situation etc.
If poor performance resulted in less revenue then identify the need for technical training and impart training / recruit employees with proper skills. Actually these analysis HR cannot do independently but you need to discuss with Head of the Departments and Location Head and take it up further.
From India, Madras
You are in an unenviable situation.
You have to communicate the management's line to the employees though I suspect you do not agree.
While increments are not an entitlement, with current inflation, not giving an increment amounts to implementing a pay cut. Why will an employee stay if they are getting less and specially where there are other companies willing to pay more?
Your post is a little confusing to me.
On one hand you are saying that company has stopped everyone's increment
On the other hand, you are saying it is related to poor performance.
If everyone performed poorly, then it may be a problem with the management or the recruitment process.
If you have to retain people, the management must communicate properly. They need to clarify they are not able to provide increment and why it is so. They may need to provide a carrot (eg. promise to pay the differential amount as arrears if the financial position improves). Even then people may not stay, so you need to be ready with a recruitment plan.
If the work of everyone is bad, perhaps it is a good thing that they plan to leave...
Or perhaps the management needs to remove / replace managers who are not able to get the team to deliver.
There is very little you, as HR, can do in this case without support from Management and a rational strategy
From India, Mumbai
You have to communicate the management's line to the employees though I suspect you do not agree.
While increments are not an entitlement, with current inflation, not giving an increment amounts to implementing a pay cut. Why will an employee stay if they are getting less and specially where there are other companies willing to pay more?
Your post is a little confusing to me.
On one hand you are saying that company has stopped everyone's increment
On the other hand, you are saying it is related to poor performance.
If everyone performed poorly, then it may be a problem with the management or the recruitment process.
If you have to retain people, the management must communicate properly. They need to clarify they are not able to provide increment and why it is so. They may need to provide a carrot (eg. promise to pay the differential amount as arrears if the financial position improves). Even then people may not stay, so you need to be ready with a recruitment plan.
If the work of everyone is bad, perhaps it is a good thing that they plan to leave...
Or perhaps the management needs to remove / replace managers who are not able to get the team to deliver.
There is very little you, as HR, can do in this case without support from Management and a rational strategy
From India, Mumbai
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