Why Do Employees Expect Raises Every Year? Let's Discuss Performance and Fairness in Appraisals

Dear Sirs,

We have to give an increment every year to the employees based on their performance, which varies from company to company.

I would like to ask, why do employees think they should receive an increment or promotion in this year's appraisal? What extraordinary or remarkable things have they done at their workplace to deserve an increment? What extraordinary things have they done this year at the workplace?

However, I believe we should give increments to employees based on the inflation rate and not more than that, and rewards should be given for extraordinary performance.

Furthermore, if we are rewarding the employees, what parameters should be considered?

I am looking forward to the opinions and replies of all my seniors.

Thanks and regards,

Abhishek Tiwari

Hi,

I think employees should get an increment according to inflation, but their performance should be the criteria for getting more increment and a promotion.

You might ask, why increment? Increment is considered to be part of a retention strategy. At least employees should get a reward for staying in the organization. Otherwise, if there is no increment and promotion, they feel like they are in the same place even after 5 years. No one wants to stay in the same place.

So, I believe employees deserve an increment if the company is performing well because that success is due to the employees.

I feel Mana is totally right.

According to me, retention of key employees is critical to the long-term success of any organization. The performance of employees is often linked directly to quality work, increased product sales, and even to the image of a company. Similarly, it is often indirectly linked to satisfied colleagues, reporting staff, effective succession planning, and deeply embedded organizational knowledge and learning. Employee retention matters, as organizational issues such as training time and investment, costly candidate searches, etc., are involved. Employees must feel rewarded, recognized, and appreciated. Giving periodic raises in salary or position helps to retain key staff.

Their performance should be the criteria for getting more increment and promotion. I think so, but in my opinion, we should reward the better performers by giving good incentives and promotions. When promoting anyone, the salary will automatically increase as per the company's policy.

I think it should be like this:
Best performer: Promotion + incentives
Better performer: Incentives + inflation rate
Good performer: Incentives + inflation rate
Normal performer: Inflation rate
Non-performer: No need to give an increment

Waiting for more comments.

Hi,

I completely agree with your recommendations on incentives. Good thought. I will be attending a seminar tomorrow evening on the same. If there are any new thoughts, I will definitely share them with you.

Regards, Jessie J

Hey, Jessie! I'm waiting for you. Day after tomorrow with your new thoughts and experiences. I hope you'll share with me. Thanks for the comments.

Increment should be given because the employees have contributed to the growth of the organization that year, so they should be a part of profit sharing.

I don't think there is any company that will give a good increment if the company is running at a loss. Increments and bonuses are very much proportionally related to the organization's growth.

Every employee working in an organization invests his valuable skills, competence, time, and energy for the growth of the employer's business.

Employers do own the business, but employees, customers, suppliers, banking or financial institutions, including society, have an equal stake in all business organizations. Because the money borrowed from the bank is public money, the responsibility extends to society as well.

An employee, being a stakeholder in the organization, is also a shareholder with rights proportionate to their input in the revenue-generating process. Simply hiring an employee does not conclude the story, and paying interest to bankers does not diminish bankers' rights in the business.

Employees are compensated for all the hardships they face during employment with remuneration expressed in terms of money, which may include basic salary, allowances, benefits, and perks, among other components compensating for their job worth to the organization.

Inflation rates diminish the purchasing power of money; therefore, this is compensated through Variable Dearness Allowance based on the cost of living index or the All India Consumer Price Index issued by the Simla Labour Bureau every three years. This practice is prevalent in the Government sector, some private sectors, and Minimum Wages Boards across different states in India.

Generally, medium-scale and small-scale employees working in white-collar jobs are cleverly deprived by owners who pay annual increments as a deceptive tactic to withhold cost-of-living adjustments. This deceptive practice avoids regular cost-of-living adjustments by showcasing annual charity shows based on camouflaged performance-linked increments.

However, increments are different and not linked to inflation. Inflation rates are influenced by the market, impacting the purchasing power of employees and their job worth. When the cost of living is compensated, it restores the job worth.

Increment: An increase in an employee's basic salary based on relative job performance and position in the salary range relative to peers.

Promotion: The reassignment of an employee to a different job classified in a higher-grade code based on organizational needs, the existence of a vacant approved job, fulfillment of job requirements relative to peers, and subject to management approval.

The above explanation is self-explanatory. As HR professionals, we should not doubt or misrepresent terms to perpetuate the myth that the employer is always right simply because they are the business owner and should have the right to take employees for granted.

Regards,

Sawant

Dear Ravi,

No need to read the book; it should be followed by the student and not by us. One more thing, I don't think there is something wrong in my quest. You need to improve yourself, man. Here, I am just discussing and nothing more; it's all my opinion. If you don't have any idea, there's no need to poke your nose anywhere.

Thanks for the reply; it was logical for you but truly illogical for others.