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In a specific case in my organization, due to retrenchment few people were asked to resign basis their performance. However, as they completed 13.5 months of service they were eligible for appraisal cycle. They were given a notification about their rating then. There was no formal letter given then about their performance rating. Question is:
Is the person eligible for appraisal rating and raise both or just rating?
If the organization decides to give appraisal rating only does that bind the organization to give raise as well?
Does this have any legal implication if the company does not give raise or appraisal rating?

From India, Delhi
Dear Phsihsa,

Are you removing few persons because of poor performance or retrenchment? It appears that you have confused both the terms. To know more about conditions under which retrenchment is done, click the following link:

If you are removing few persons because of their poor performance then where is the question of salary hike? Salary hike is given provided employees meet the performance requirement. If they fail to meet then they are ineligible for the salary increase as well.

It appears that you have confusion in the Policy on Performance Appraisal. Why performance appraisal was done after 13.5 months? Generally it is done quarterly or half yearly. Therefore, on completion on their employment if the appraisal is done and if the rating is below the expected level they are liable for removal from employment.

There is no legal binding on salary increment as long as wage are above minimum wages. However, the important thing from legal standpoint is proper communication on the continuation of employment vis-a-vis their performance. Have you done that?


Dinesh Divekar

From India, Bangalore
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