Dear All Seniors,
I am working in a MNC as a HR Lead, I want to know that is there any type of Law or Act for the increment of salary every year for the employees. If there is anything please let me know. Even if there is no Act or Law so how I can evaluate their performance appraisal for increment. Please help.
Thanking You
Himangsu Das

From India, Bangalore
Partner - Risk Management
Hr Manager
Asst.manager -hr
Gopinath Varahamurthi
Mindhour Partner, Ass.professor/adm. Officer,
Hr & Administration Specialist
Kritarth Consulting
Posh Programs; Hr Management Consultants
Bhargavi Sesham
Hr Executive
+3 Others



Different types of Appraisals, there is no law and act for Appraisal system.

1.360-Degree Feedback

A common performance appraisal method is the 360-degree feedback. In this scenario, whoever conducts the appraisal, such as a human resources manager, interviews an employee&amp,supervisor, peers and any direct reports. This technique allows an appraiser to gain a complete profile of the employee. In addition to gauging the worker&amp,job performance and technical skill set, an appraiser receives in-depth feedback on the employee's behavior. Measuring areas of subjectivity, such as character and leadership skills, allows an employer to manage an employee&amp,development.

2.Management By Objectives

Management by objectives (MBO) is another modern method of performance appraisal. This technique was first promoted in the 1950s by management theorist Peter Drucker. MBO requires a manager and employee to agree upon specific, obtainable objectives with a set deadline. For example, a sales manager may be required to increase his revenue by 25 percent within three months. Once this goal is set, the responsibility is on the sales manager to direct himself towards the objective. With this technique, success or failure is easily defined.

3.Ratings Scale

An alternate type of performance appraisal is the ratings scale. This methodology requires an employer to develop an in-depth grading system, similar to the way students in school are assessed. This scale is then used to evaluate an employee’s success within a variety of areas, such as technical skill set, teamwork and communication skills. There is typically a minimum required grade an employee must receive in order for the performance appraisal to be considered a success. Those that do not make the grade are often put on a performance improvement plan. This method is viewed by some management theorists as an egalitarian way of measuring individual performance.




6.Behaviorally Anchored Rating Scales (BARS).

BARS combine elements from critical incident and graphic rating scale approaches. The supervisor rates employees according to items on a numerical scale.

From India, Mumbai

There is no law on this It is the prerogative if the management to decide on salary to be given and increments, so long as the salary is higher than minimum wages.
From India, Mumbai
Bhargavi Sesham

Along with all the above mentioned suggestions. make it clear for all the employees that Hikes are not mandatory after appraisals. An Appraisal process is indirectly managing the employees performance.
Hikes/ Increments in salary is directly related to the performance of the team and project and account and business unit and profit, along with individual performance during the appraisal period which includes all the management objectives and KRA's.
Since you are working with an MNC, they will be having some specified formula to calculate and measure the hikes. Also a pre- defined Performance management system. You may need to consult with your seniors upon implementation of performance appraisals.

From India
dharmesh sartanpara

Dear Himangsu Das,
Being HR professional it is my suggestion that before going through performance appraisal system , it is very much important to utilize our human resources in the line of mission, vision and direction of the company. Define the KRAs for each individual and set the goal/target accordingly to contribute in the growth of the company. Please note that performance appraisal does not give any guarantee of salary increment/hike.it is solely based on employee's work performance and KRAs defined by the company and what and how you contribute in the growth of the company.

From India, Surat

There is no labour enactment for annual increment. Every organization does this exercise, according to
their own performance appraisal policy/annual increment policy/compensation hike policy.
Depending on the size of employees, awarding of annual increments, vary from company to company.
First, being an HR lead, you have to outline a policy that best fit into your own organisation.
Then chalk out a detailed policy and implement the same.
It is suggested that annual increment may be linked into employees job performance, so that
you can put your colleagues in different departments, in the loop, in the process of
performance appraisal system.
Thanks, R K Nair

From India, Aizawl
Kritarth Consulting

Dear Himangsu

Your Query - " I am working in a MNC as a HR Lead, I want to know that is there any type of Law or Act for the increment of salary every year for the employees. If there is anything please let me know. Even if there is no Act or Law so how I can evaluate their performance appraisal for increment. Please help."

Position : Except the Minimum Wages Act and the Payment of Wages Act and the Judicial Pronouncements in cases of denial of propriety, justice , Fairness, that touch upon the Issue/Subject of Increment in Wage or Salary, there exist as on date No Law / Act on the subject.

Fixing Wages /Salary for Employed Persons is Employers Prerogative, exercised only by the Employers/Managements. At times, Employers / Management are on their volition Open to Negotiation with Workers Representative Trade Unions or such other Lawful Body considering the Organiation's Sustainability.

As far as granting Increments is concerned, it is advisable for Employers/ Managements to remain Transparent, ethical, impartial Fair to the People and True to the Cause ( sake of more Profits/Profitability /2 ROIs.

You may adopt a Scheme suitable to your business sustainability concurrently promoting Wellbeing of all Stakeholder

Kritarth Advisory Team

11 Sept 2014

From India, Delhi
gopinath varahamurthi

as regard increment of salary every year is the question, at the time of appointment you have clearly issued in the appointment order stating the annual increment based on performance or enhancement of salary thus the question is solved.. all other criteria of motivation, promotion and fixation of pay, also the work performance are co-related, the efficiency performance in accordance to the jobs being served and the tasks undertaken clearly above the normal pay increment are the most beneficial, the employee do make himself develop with the organisational development. So, the minimum of wage/salary increment is being clearly stated in the appointment itself....reiterating the minimum wage/salary increment...
From India, Arcot

Hi there,
Please find attached thread with PDF sample of Increment Policy

From Oman, Muscat
Keshav kumar 51
As per law - increment is applicable for worker grade which we know as minimum wages revision at every six month in all industries.
For staff- increment will be depend on performance basis and internal company policy, and now a days we see incentive policy is established in many organisation for moral high.
As per my knowledge there is something in law applicable on decrement, If decrement in any circumstances then any-employee can take legal action or not - please advice your views.
Thanks & Regards
Recruitment Manager
Tejomay Services

From India, Delhi

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