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We are a small company, and have an employee working with us for about 11 years now. She joined at a salary of about Rs 4500 and now she’s drawing a salary of about Rs 27,500 + PF. We are a small organization. We have always given her maximum raise of about 20% as per our company policy and on many occasions even more this. She’s an honest and dedicated employee, though not a star performer as far as technically her work is concerned. But she performs her duties well, and has high integrity. I wanted to ask you that since she has always been given maximum increment of about 20% on her gross. She might expect the same increment this time also which will be an amount of Rs 5500.

But then there is a limit to how much increment our company can always give. When her salary was low we always kept her giving increment between Rs 3500-5000 Rs. I mean if we give the same increment this time also then her salary would reach around Rs 33,000 but we can give an increment of about Rs 4,000 which is not bad, and will make her salary Rs 31,500. So my question is that what rationale can be given to her for not giving 20% but may be 18% increment because this is what the company can afford right now. Moreover, she is someone who will be permanent, or will remain for a long time with the company. If we keep giving her 20% increment always, then at a point we may not be able to afford that amount of salary as our company is small with a lesser turnover.

What do you think should be done in this scenario? As the amount of salary increases, does the increment percentage also remain the same?

Please give your suggestions as soon as possible. Thanks.

From India, Faridabad
If you have given an increment of nearly 20% every year that doesn't mean that this time also you need to give 20%. It can be higher or lesser as the management decides. There is nothing to be feared to reply why you have given less increment. Just say her that in present scenario you should be hapy that atleast your salary is protected and its management decesion.

From India, Delhi
Ifmanagement decides give 18% then tell her clearly that management had approved only 18% and tell her that even in recission time you had been increment but most of the companies had stopped increments and company is protecting you by giving existing salary.
For your information most of companies in present year they had divided existing salary into 2 parts - 80% fixed and 20% performance based salary for cost cutting and also saving the company.

From India, Hyderabad
Dear Meenu,
I am agreed with sanjeev and ravi b'cau today most of the working professionals are scared about their jobs and if she gets an increament of 18 % is not bad in any case. Atleast mgt has a positive approach.
regards and best wishes.

From India, Bhopal
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