Notice Period Dilemma: Should Employees Leaving Soon Get a Raise Too?

Serving notice period, eligible to get a raise?

Hello everyone,

I have a query regarding an employee. He has a good track record for performance but is leaving the organization after two months. If management decides to give a raise to everyone in the company, is he eligible to receive a raise?

Please suggest.

Thank you,
Manasa

Simply put, your question is whether the employee under notice period has a legal stake in the general hike in salary offered to other employees. It depends on many factors. Moreover, there is no mention in your post whether the notice period is due to his prospective resignation or termination at the instance of the employer.

Since, admittedly, the outgoing employee has a good track record, there is no harm in exercising the option of granting him the hike despite his exit, if it is of retrospective effect. In that case, I think he has the right to claim the hike on par with others. If it is a resignation, the hike may influence his decision to quit, and he may withdraw his resignation before the expiry of the notice period. Therefore, the quantum of the hike and the date of its implementation are crucial factors in such a situation.

Even at times, an extraordinary hike with prospective effect can also play a vital role in reversing the decision of resignation, effective from a future date.

Regards

It is purely a resignation, and he is serving the notice period now, and we accepted it.

My question is - does he have an option to claim? And is it mandatory to give a raise to the employee who is in the notice period?

Whether to give an annual increment to an employee who is under the notice period is at the discretion of the management. It has become a discretion-based decision because this situation was not anticipated, and the Policy on Compensation and Benefits or the Policy on the Performance Management System (PMS) did not include eligibility criteria for an annual increment.

As of now, take this as a one-off decision. However, amend your policy first. As long as you pay anything above the minimum, annual hikes are beyond the scope of labor laws; hence, no comments can be offered.

Thanks,
Dinesh Divekar

Considering Retention Strategies for Resigning Employees

An employee who has tendered his resignation has likely done so after exploring multiple options. In this case, the question arises whether HR has offered him a salary hike to retain him and if he has turned down any increment offer. If the employee has declined the monetary increment offer and decided to move on, he does not deserve to receive the increment along with others.

Let him explore other options. If he appreciates your company, he will certainly rejoin or withdraw his resignation.

Regards

The first question that arises here is, as an HR employer, have you initiated efforts to retain him if the employee has resigned due to a better prospect (specifically a salary increase)? A salary increment may persuade him to reconsider his resignation. If the employee has other reasons for resigning and if you, as an HR employer, can assist him in overcoming those reasons, it would be beneficial in maintaining a good track record of employees.

I don't think that he is leaving for a raise; he might have gotten a better position. HR and management accepted the decision. If we give him a raise, I don't think he's going to stay.

That is what you think. Did you speak to the employee to find out the reason for leaving? There may be other reasons besides seeking a better position or a raise in salary. It's possible that you or your management simply accepted the resignation letter without delving deeper. You mentioned that HR and management have accepted the decision. What is your role in this situation? Additionally, what is the viewpoint of your HR and management regarding the salary increase for an employee who is serving notice period?

In such a scenario, it is advisable to give his entitled increment. It will be for a few months only, but it will have a great impact on the employee as well as others. It may change his mind too, or he will always speak well of your company.