Is Annual Salary Increment Mandatory for Everyone in a Manufacturing Company?

Dear All,

I am working in a Pvt. Ltd. Manufacturing Company and want to know about the increment details. Is an increment compulsory for everyone every year? Please tell me about this.

Dear Dinesh Kumar Thakur, you could have given a little more information as to why you are asking this question. What is your designation? Are you the owner or from HR? Is your company running at a loss?

As long as you pay minimum wages to your employees, from a legal standpoint, everything is fine. However, an enterprise cannot be run solely by fulfilling legal obligations. An enterprise has to sustain competition. By stagnating the monthly salary, will you be able to sustain competition? A reply to this question is far more important.

Thanks,

Dinesh Divekar

Sanctioning of an increment is not a right under any statute. It is given once a year as a mark of performance of your employment. In your case, as the company is not in a loss, you can propose to your management to give an increment to employees ranging from 5 to 10% based on the performance of people.

Sorry, I do not agree with the view that the release of annual increments to employees is a gesture of goodwill to mark performance. I am of the opinion that it is granted to compensate employees for the hike in the price index. Minimum wages are revised twice a year on this ground. I think there is no industry or establishment in the private sector that has a provision for DA linked to the price index.

Thanks,

V K Gupta

Dear Dinesh,

You can implement your increment as per the profit of the company. A fixed budget is set for the increment, and it should also align with the inflation rate fixed by RBI.

Increment to an Executive-HR!

Please note, though it may be one of the conditions in your appointment letter that an annual increment may be considered based on an individual's contribution and company performance. Annual increments are in practice in most companies to meet inflation, and the policy is reviewed based on the cost of your talents in the market demand. The trade-off is between productivity and wages. While employers want an increase in productivity, employees want a share in that. However, in a private setup, which I assume you are in, it's not compulsory and not always practiced.

You can chat with your superior, but with care if you have that rapport with him, saying, "Sir, the year is gone, and if the management has an inclination to visit our remuneration policy, etc." You can ask if the company plans to award an increment or not. What's the prevailing HR practice here as things are not written in terms of policy, etc.

Regards,
RDS Yadav
Management Adviser and Trainer, Director-Future Institute of Engineering and Technology.