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Dear Seniors/ HR Fraternity,

I'd like to start this discussion today as we have approached the end of April'12 where in we'd have decided as to what salary hike to be given to our employees. I'd like to take your valuable comments so as to understand how i can go ahead with salary hikes for my manufacturing company in Tamilnadu that employs about 47 people. The company was started 2 years back and has already given an increment once.Though, the company is still not doing well and is going need some more time to break even, we have decided to give increments to our workers and staff. I'd need your kind suggestions on the following.

1. Is increment mandatory every year as per factories act or minimum wages act?. In our case, our company is only 2 years old that is yet to see its profits. Do new companies have an exemption to give salary increments like we have exemption of bonuses for a period of 5 years for startups?

2. What is the normal salary increment in a manufacturing industry in your region and how it's arrived?

3. An average salary in our company is Rs.10000 for workers having 10 years experience. If we wish to give an increment, how should it be reflecting on the salary components like basic,DA, HRA etc in a way that doesn't place burden on the company.

Please give your valuable suggestions.



From India, Madras
1. Increment is not mandatory undr any legislation

2. Factories act is about working conditions, safety and welfare and leave facilities and is not about wages

3. Minimum wages act is for ensuring minimum wages for scheduled employments and it has two components in Tamilnadu One is Basic and the other is Dearnes Allowance

Dearness Allowance is revised once in a year i n April. After the reveision in April 2012, Minimum wages in Tamilnadu for Unskilled is about Rs 5500. I do not remember the exact amount.

4. If your basic plus DA is above the Minimum wages level, you do not increase wages whether you make profit or not.

But morally we have a responsubility and i normally recommend a revision as ubder

1. Some increase tpwards inflation. If you are paying Rs 10000, then make it a practice to give an increase of atleast 50% of Minimum wages DA which is equivalent o Rs 175 for this year for all workers and staff effective 1st April

2. Introduce Performance appraisal system and increase based on evaluation. For a company of your size you can categorise people into A, B and C and give an increase of Rs 100 for C Rs 200 for B and Rs 300 for A This will work out to 2.5% to 5% increase which is low. On a good year you can revise by 10 to 15% and on normal year you can increase by 2.5% to 5%, Also, you must plan for 20 to 30 percentage increase once in three year to cope with market trends

T Sivasankaran

From India, Chennai
Dear all,
If a Employee is asking for the salary High(due to Loan pay or thinking of less salary), and the company is asking the Loan document is it Necessary to give to HR or it's rule to high the Salary for the employee, (HR is saying that need those document to submit if audit asked)
plz confirm me... any one

From India, Bangalore
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