Dinesh Divekar
Business Mentor, Consultant And Trainer
Nagarkar Vinayak L
Sr.manager - Hr&admin
Sandhya Arya
Hr Specialist
+1 Other

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Hello Everyone, Please let me know what policy should be in place in case an employee decides to leave the organisation or resigns immediately after the increment? Should we have to revoke the salary increase or not?
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Hi, Appraisal Increment is for the past performance period under review. Hence we are not supposed to revoke it when employee leave the company. However nowadays most of the companies are adding a point in the appraisal letter stating that "in case of resignation within ___months from the effective date of increment, Management reserves its right to revoke your increment"
If you have added the clause you may revoke but without anything in paper if you do, you need to face the questions.
Hi Sandhya,
As per my legal knowledge; we can not hold the payment due to separation only if its have some legal dispute . Mentioning in paper does not qualify in court of law. If we have credited x payment in bank account than we cant ask back but if its only in form of increment latter than possible.
I will suggest to prepare comprehensive retention framework along with organization strategy.
Dear Sandhya,
Please note the following:
a) Employee retention is always a challenge in Small and Medium Enterprises (SMEs). Everybody wanted to work in a branded company. If not branded then it has to be at least sufficiently "big" company.
b) To grow their business, employers ride on the back of the employees. Conversely, to grow their career, employees ride back of the employers.
c) As far as the survey by naukri.com is concerned, they say that in the month of July and August, there is a surge in the activation of naurki account. In fact, many vacancies are filled from August till December. This is common across all the industries.
d) The employees wait for the appraisal because they wait for the receipt of the new salary slip. With 2-3 salary slips in hand, they search a new job. This helps them to bargain more with a prospective employer.
e) Revoking of increment is ridiculous. I cannot comment on the legal validity of this move but then if you tell the employees to refund the increment amount, then what is the motivation left for the employees?
f) What if you make a policy on taking back the increment and even then also the challenge of employee attrition remains? You will be back to square one.
g) The challenge is how to make employment attractive. Attractiveness does not depend alone on the remuneration. You need to find out other avenues also.
h) When employees decide to quit, they always look for a better hike. But then the decision to quit is not necessarily because of poor remuneration. It can be because of other factors like poor leadership, lack of empowerment, lack of team spirit amongst the team members etc.
To retain the manpower, try improving the team spirit amongst the employees. Second important point is to improve the interpersonal environment. These two factors predominantly shape the culture of the company.
Dinesh Divekar
Dear colleagues,
No doubt, the increment is given for the performance in the preceding year.
But somebody resigns immediately after the increments shows very unethical and deliberate intention to pocket the increment and quit. In my view the aspect of retention strategy is pushed into the background given the dubious intention on the part of the employee.
After the increment , the employer has reasonable expectation from the employee to continue to contribute.
But the employee takes the company for a ride like this, I do not believe it is wrong on the part of the employer to revoke the increment.
Vinayak Nagarkar
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