I think that the action by the employer goes against the very logic of the concept of increment. Increment means the marginal increase. So, during an increment cycle, the salary should be increased or not increased to the next step but cannot be reduced due to poor performance.
Reduction in the basic salary consequent on appraisal is punitive which would be illegal in the absence of a formal disciplinary proceedings preceding it.
25th July 2019 From India, Salem