Here is my situation:

6 months I worked in India and 6 months in the US (India payroll). The first 6 months I was under manager 1, and the second half (6 months) in another team under manager 2. Logically, both 1 & 2 come under the same umbrella with the same senior manager.

It also means the appraisal cycle for the first half is with manager 1 and the second half with manager 2.

I kind of felt they wouldn't allocate a budget for me since I am in the US. So, I did my homework and sent all work I did, appreciation mail from customers, etc., two months in advance to all managers and senior managers, and even called for a 1:1 with my new manager to review my work.

Now comes the appraisal cycle.

I was expecting both managers to do my review and rate me. From the meeting, I understood they did not have any communication to decide my rating.

The first manager said this is my rating and a 5% hike.

The second manager said I am doing a GREAT JOB and had no complaints or improvement suggestions.

Then I asked why 5%. The reason was I am overpaid compared to all my peers.

I used to get 15%+ on a regular basis, so 5% was kind of an odd number for me.

I said I am not happy, and they arranged a call with the Senior Manager. As expected, he said the same, it's an act of rebalance, I am overpaid compared to peers, etc.

Now I have an option to move to the director, HR, etc. But the Senior Manager says that wouldn't help much since it's a directive from top management.

Now I am confused whether to escalate further or not. I have a good relationship with all these managers, so I am confused if I should fight my case further.

Any advice? Thanks for your time.

From United States, Boston
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I have seen a general practice that people working onsite (Indians working abroad) are getting a 5-8% salary hike. This is considering that they are earning in dollars, and that itself is a big incentive. Your savings onsite are multiplied by the dollar conversion rate when sent back to India.

People working offshore and facing inflation here get a 10-20% hike. I believe that this action is justified.

From India, Mumbai
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Well, you can definitely discuss it with your seniors, but most likely you will get the same response. You have the right to question them. Escalation is not harmful if done as per the process and in a humble manner. Your seniors will not get offended. It's always good to try. :-)
From India, Mumbai
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Normally, performance appraisal at the end of the year should be done by the manager to whom you were reporting at that time (unless you have been told that your manager in India is the primary manager, i.e., your designated appraiser). In either case, the one authorized to initiate your appraisal is supposed to collect performance inputs from the second manager (for the period served under him/her). You, as the appraisee, are not required to send such performance inputs to anyone. That is what happens in mature organizations. These days, software support systems like 'EmpXtrack' are available, which enable the reporting manager (appraiser) to collect online inputs (in writing) from the second manager (and from other managers, if required) about your performance record while serving with them.

While I agree with the other experts (who have given their opinions above) that no useful purpose will be served in raising the issue, but you can certainly clarify with your HR how the current system works. You are welcome to share my comments with HR so that they are aware of the modern tools which enable the refinement of existing processes to make them more objective and employee-sensitive.

From India, Delhi
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