In our organization, there was a system of 6 monthly appraisals. Now we want to move towards yearly appraisals which will happen in September every year. This April since we do not want eligible people to miss out on increments, we will be appraising them and letter of increment will be given to them but actual payout will happen only in September 09 (it will be mentioned in the letter).
My concern is, will there be any legal hassle (under labour laws) if we declare increments in April and payout in October with the knowledge of employees?

From India, Pune

Hi Priyanka, Increment is a part of rewards and recognition system, which is the option of employer. There is no such Law for this increement. You can go ahead by informing your employees.
From India, Mangaluru

Dear Priyanka,
. First of all make the necessary changes in the company's HR Policies. It will be official.
Handing over the increment letters in month of April 2009 & it will be effective from september wont be feasible. Employees might take advantage of this increment letters
and negotiate with the other company's for new job.
One option will be to handout the increment letters & effective dates from April 2009.
Second option will be to declare the increments & effective dates will be from September 2009.
There is no law for the increment & appraisal sysytem.
Nimish Joshi

From India, Mumbai
Human Resources Manager

Dear Priyanka,
What would be the logic to declare in April but implement in September.
In September are you going to give arrears from post April ?
I also feel dissatisfaction would increase and people would leave post September receiving their increments.
Your situation ( need more details) requires a strategic approach to ensure employee satisfaction.

From India, Mumbai

The System of Increments which your organization propose to implement is not at all praiseworthy . In case, your organization is planning to pay arrear payments to your employees from 1st April, then it is OK. Otherwise, it will be better to give letters in the last week of August/ 1st week of September mentioning amount of increments and its effectiveness wef 1st September to avoid dissatisfaction among the employees. However, since increment and apprisal system does not come under the purview of any law, your organization can take decision at its sole discretion.

From India, Udaipur
This April you do the increment for eligible persons. And make necessary amendement in your company policy mentioning yearly apprisal and increment every year in september.
From India, Mumbai

Hi Priyanka,
My query is if you are issuing a letters in April saying Payout will be done in Sept effective April onwards ( I.e Arrears), and any employee leaves after April , Would you pay the arrears and do the F & F as per new salary? There can be a legal compliction unless you mentioned a relevant clause in the increment letter.

From India, Mumbai
It would be advisable to give increments effective from September by informing the employees about the same to prevent any confusions in the query raised by Harshad.
From India, Mumbai
Prabha Naidu
Hi Priyanka,
First of all let all the employees be informed about the change in the policy and put it very straight that it is management decision. secondly there is no legal/third party obligation on giving increment letters/payouts as they are all internal company matters.
Prabha Naidu
099989 46562

From India, Vadodara

Dear Priyanka,
There are 2 options to this situation.
1. Send a communication in April (or last week of March) to employees whose increment is due and say that increment will be given in September including arrears from April to August and inform them that revision will happen once in a year henceforth in Sep.
2. Other option is to send a communication saying that management has decided to do the yearly appraisals henceforth and the same will be done every September. If your management has decided to postpone the increment because of the economic meltdown, you can communicate the same reason. so that employees may forgo the salary increment from april and august. Communication should be clear.

From India, Bangalore
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