Dear Seniors,
I am working for an state PSU manufacturing unit. In our organisation there is a fix 3% increment of every year to all the employees. Now my question is that If an employee's attendance is less than 240 days in a year then is he eligible for that annual increment of 3%? Please help me with your kind suggestion and specified the exact calculation for such annual increment.
Also mail to

From India, Delhi
You have not mentioned whether the PSU in which you are working is a Central Govt. Unit or State Govt.Undertaking. The award of annual increment is based on the service rules/regulations adopted by the PSUs.
If you or any of employee of your organisation has been denied yearly increment, then you/employee can ask the management about the rules/regulations on the basis of which the annual increment has been denied.
With regards;
Harsh Kumar Mehta

From India, Noida
PS. You have mentioned as "state" PSU in your remarks. So please see which of the service rules are applicable on employees of your PSU. You can also ascertain the causes of non-sanction of yearly increment through RTI.
Harsh Kumar Mehta

From India, Noida
In pvt organisations, the increment is on prorata deducting the LOP period subject to the performance of individual. Pon
From India, Lucknow

Dear M. Guna,
Yearly increment is a type of award, which is given to an employee for his / her dedication towards work, work performance and for encouraging the employees. But, the employer cannot be forced to give increment. It can be given on the basis of work performance / rules of the company / govt. notification, if bounded for it / as per terms of Appointment Letter.
You have mentioned that, you are working for an state PSU manufacturing unit and you have also mentioned that "In our organisation there is a fix 3% increment of every year to all", which is indicating that you are deployed there through any contract agency, if I am right.
So, in this case, there might be any Rules & Regulation / Terms and Condition for yearly increment of employee as per the contract agreement with State Govt. So, kindly ask your management regarding the criteria for Yearly Increment.

From India, Delhi

PSU service rules is an unknown territory to me.

Based on Private Sector practices, applicable law and at a conceptual level, I wish to state the following:

1) The magic figure of 240 days has relevance only as regards determining eligibility to Earned Leave in the manufacturing sector (where Factories Act is applicable and as regards the Industrial Employment (Standing Orders) Act 1946 where Clause 4-C of the Model Standing Orders make it mandatory for the employer to confirm any temporary employee who completes 240 days in a period of previous twelve months.

2) At a conceptual level there is a very weak connection between "attendance" level of increment. In fact there often is seen a negative correlation but just because of "good" attendance anyone getting a good increment is really unheard of!

3) Increment and 240 days of attendance is NOT an issue at any law. It is the Management's policy on the subject that should decide the issue!

Trust there is enough clarity on the query.



November 9, 2013


From India, Pune

Dear Guna
The Increment is based on the Performance of the employee and the company's profit. As said by Mr. Samvedan the 240 days count is meant for Earned leave calculation, Gratuity calculation and serving of notice period and not for calculating increment. The increment can be calculated on pro-rata basis based on the company's PMS Policy.

From India, Kumbakonam
It is very difficult for members to respond to your query in the absence of actionable information. I can only say in general terms that in PSUs, normally granting annual increment is automatic unless the employees exhausts his leave and remained on loss of pay. Thus in PSUs the possibilities of withholding or postponing an annual increment may arise in the following cases.
1) when the absence is on loss of pay in which case the increment gets postponed to the extent of loss of pay or.
2) where an increment is withheld by way of punishment or
3) where th granting of increment is linked to efficiency bar/ or performance as laid down under the rules.

From India, Mumbai
Normally there is no such a restriction of attendance to get an annual increment. However, such a policy is fixed while deciding the increment pattern or the wage scales. In this regard, I fully agree with Mr. B. Saikumar, as instead of searching for an answer from outside, you must first find out from within your organisation, how and when the system of annual increments was introduced and for that if there any qualifying clauses.
From India, Kolhapur
As I endorse the reply of Mr.Sai Kumar, I may add what has been said by him as follows,

While the increment in PSUs is time bound, automatic grant except when withheld by a specific order as a punishment arising out of a disciplinary inquiry as a result of charges framed like unauthorised absence (habitual absenteeism), other offences warranting inquiry etc. Even in LOPs when these kinds of extra ordinary leave granted or authorised leave (for higher studies, confinement, sickness) still the increment could be granted if the concerned authority satisfy the genuineness of the ground of leave.

However if and when the Probation period is not completed successfully and extended, the increment could be postponed irrespective of the time bound rules.

In many cases when increments are withheld as a punishment, the authorities revoke later, on some grounds like subsequent good performance or such other considerations, including the interference of Union influence.

But in private sector in many cases it is not automatic but based on performance etc.

From India, Bangalore

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