Salary Hike Confusion: Is It Based on CTC or Gross Salary in Your Company?

Hi all,

We are working in a small organization with a headcount of 50 members. We have our performance appraisal for this year, and I need clarification on whether the salary hike is given on CTC or gross salary.

Thank you.

We are working in a small organization with a headcount of 50 members. We have our performance appraisal for this year, and I need one clarification: is the salary hike given on CTC or gross salary?

Dear Sriram,

It is purely as per management decision, but ensure it will not affect the net salary in terms of TDS and cost impact for the company. In the case of Grade IV employees, it is based on an increase in DA points under state and central departments. Technically, PMS should be mapped with performance (JD - Job Description, KRA - Key Result Areas, and KPIs - Key Performance Indicators).

Thanks and Regards,
Karthik
+91 81211 97979

One principle to bear in mind is that the hike, whether on gross salary or on CTC, shall enable the employee to neutralize the increase in inflation and provide some relief in their costs as well. Therefore, the wage hike is a balancing act between the two costs, i.e., employee and employer.

B. Saikumar

Dear,

Isn't CTC dependent on Base (Basic) Pay? Or, in your case, are these two different and distinct entities?

Hike is generally done on the Base salary. The CTC hike follows from it.

Warm regards.

In both cases, will the employee receive the same salary or a different salary? What I mean to say is: even if a salary hike is given on the basic salary, it will be reflected accordingly in the CTC, won't it? Also, the amount that the employee takes home actually remains the same. The only difference is when we look at things from the CTC perspective, the increase may appear larger. This is a better way if the idea is to fool the employees into believing that they are being given a bigger carrot!