Impact Of Inflation Over Salary Of An Employee.

Dear All,
I have a query in my mind about the increment policy of the organizations. I am working in the organization (NGO) where the inflation is not considered during the increments. Increments are only based on the performance that the person has shown during his past year.
I wanted to ask a query to all HR professionals about what is practiced across the sector.
IS inflation part of increment? or Increment is given after giving the inflation?
Kindly help me sharing your views and experience.
Thank you.

Hi Vishvajeet,
This is sumita here I also work for an NGO in Mumbai. Can you please help me with PMS you follow in your organization.
Thank you
sumita mehta

The general practice followed is to consider inflation also while considering the annual increments, especially for people who are not covered by dearness allowance.

Thank you KSHASHIKUMAR NAIR.. Appreciate your inputs.
Are their any legal obligations if the said system is not followed.

Hello Viaswajit,
I don't know about NGO increment practice.Industry practice of basic salary scales and numerous allowances constituting total CTC (cost to Company) has inbuilt shield for inflation.Progressive organisation do consider inflation element in granting annual increments where there is no separate DA. Except under Minimum Wages Act, there is no law requiring employer to pay any allowance related to inflation.

It depends on the company and its standards no matter what the economy is into.

Dear Vishvajeet,
There is no legal obligations if the system is not followed, however this will help HR to deal with employees when the question of cost of living arises after the increments are announced.

NAGARKAR VINAYAK, Can i get some documents for my reference. Is it possible to anyone to share the documents.