Frustrated with Increment Delays: Do We Have Legal Rights to Timely Raises?

Hi, I work for an Indian company that has been present in India for 50 years (Headquarters in Mumbai). It's a renowned company and stable without any debt. I have been here for 3 years.

Increment Delays After Appraisals

Irrespective of the company's performance, the increments here always take place six months after appraisals. For instance, my appraisal was conducted in March 2017. The review and ratings were closed in the same month. However, we still haven't received our increment letters, and it's now August 2017. This has been the same for the past 3 years and earlier as well. The news we received is that the letters will be distributed in September, and arrears from April will be credited in October (September salary).

Employee Rights and Legal Recourse

My query is, do we employees have any laws or rules that we can utilize to raise our concerns, considering this practice has been followed for decades? The company has an employee strength of over 3,000 across the group, and the turnover crosses Rs. 15,000 to 20,000 Crores every year. Our company abides by every law in the book. Don't we have any employee laws or rights that allow us to fight for our increments on time? Please help.

Please understand, your company is not doing anything wrong. The calculation of increments every year is a very delicate task that needs to be processed while considering many factors. Yes, the process may take time, but the company is compensating you with arrears as well, so you need not worry, and no action is required.

Government's Role in Employee Compensation

The government ensures that minimum wages are paid to employees on time. However, when it comes to increments, the decision lies with the company, the employees, or the union of employees on mutual grounds. This process requires time.

First, I suggest that you register yourself on this site. It would be best so that you can get more responses.

Regarding your query

Since it's not clear to me, there can be two scenarios: (1) Annual Appraisal policy is clear, (2) HR head is not strong and backed by top management.

For the first scenario, may I know what your policy is for annual appraisals? Some companies start their performance evaluation earlier to align with the projected date of giving appraisals (i.e., increments and promotions). This proactive approach is due to the large number of employees, showing that HR is being proactive. If this is the case, then your company is doing its best to provide for all employees.

In the second scenario, I commend your company for providing arrears. If you are clear about the annual appraisal but HR's actions differ, it indicates serious problems within HR. If this is supported by top management, then there might be little you can do. However, you need a strong HR head who can implement an 'on-time' policy and turn things around. Top management should support timely appraisals. Due to the company's reputation, no one may dare to address this issue. Conducting a written survey could help improve the situation. Gathering responses from employees who disagree with the current procedure may shed light on the problem. Ensure the survey is approved and not for personal gain but for the benefit of all. The survey questions should focus on company policies in general, not just appraisals. Good luck!

Understanding Increment Policies and Legal Requirements

Firstly, receiving the minimum wage is a legal requirement, while annual increments are considered a perk. Therefore, there is no law mandating that increments must occur every year.

Timing of Appraisals and Increments

Secondly, if your appraisal was finalized in April, were appraisals for the entire organization also concluded in April? If not, the HR department will not release increments in parts, as this process is typically done collectively.

Addressing Delays with Management

Additionally, have you inquired with your Head of Department about the delay? They may be aware of the reason, or it could be company policy. It is advisable to clarify this first, as acting prematurely could lead to unintended consequences and negatively impact overall company morale.

Thank you for your reply, Manoj. This is my fourth job. All my previous companies used to give appraisals and increments on time, usually within two months of my appraisals. If MNCs can do it, then why can't we? Does this mean that we or our domestic companies are inefficient? I don't understand why it should take six months.

It's HR's responsibility and duty to highlight this issue to management and resolve it. If we are being appraised and rated on time, why the delay in receiving letters and increments?

Thank you, Sallohal. Appreciate your reply and advice on my post.

As you mentioned, our policy for appraisals clearly states that employees should finalize their appraisals with their manager ratings before 31st March. This is ensured by sending reminders via email to managers and top management.

Yes, our HR head is strongly supported by top management, and it is their influence that causes the delays in increments.

Our HR department is very efficient in completing appraisals and ensuring that all mid-year and full-year reviews for the entire organization are finished before 31st March. This is a key result area for them.

There should be a rule in place to ensure increments are given on time. All my colleagues are in agreement with me on this matter.

Conducting an online survey is a good suggestion. Thank you.

Dear Swap,

As rightly said by Mr. Ashutosh Thakre, appraisals are a perk, and thus there is no law which states the applicability for the date of increment. Please understand that sometimes processes take time to complete, but it is necessary to consider if it is really causing a loss to you in any way, whether monetarily or otherwise. If it is, then it is worth discussing.

Thank you.

Hi Swap1208, I can see now—as you mentioned, your HR is very efficient. This means there is no issue with the HR itself as the team is true to their tasks. The top management is the one who has delayed the approval. Don't get me wrong here; I am not against your company, but I will explain further the reason. It's a full team effort to help the top management and your company recover from such delays. I say your company is doing the best they can to provide for all employees.

Factors Affecting Delays

There are things that can affect such delays. One of those is the delay in payments coming from your suppliers/buyers, which affects the whole budgeting. Another is that there could be no ready year budgetary plan by Accounts and Finance. I guess the problem is not easy for your top management to handle because this will take all the department efforts—teamwork. In a manufacturing industry, if the production is delayed, it does not mean the issues are in production alone. There could be a delay in materials. If there is a delay in materials, one reason could be the late release of payment from Purchase/Supply chain/Logistics. Why the late release of payment? There could be a delay in payment from buyers for the last orders shipped. What I am saying here is that in every delay, there is a root cause that chains back from the beginning.

Personal Budget Planning

The problem that you may be experiencing is a lot deeper than we can think of, and you may waste your time finding out the real problems, and it may be beyond our capacity as well. In my personal life, I have a yearly budget plan ready for the next year. I normally finish this by December, and it details all the birthdays, celebration months, school expenses, house and car bills, utility bills, and all others. I keep a record as well of all the ins and outs of the financials for a yearly analysis—to let me understand if I spend more or if I save some. This budget plan helps me ensure that I have what I need in that month without delay.

Recommendation for Top Management

To make it short, the top management may prepare a yearly budget plan (if they don't have one yet) that includes all costs/expenses, from manpower, machines, and materials. In this way, the appraisals will have an on-time budget in a fixed month because it's part of the budget plan, which means that there is allotted money for that particular month. Now let me add, it's not easy to do this because your Accounts and Finance have to do a deep analysis of the business to see where there are losses and gains.

Indeed, it is correct that providing increments by exact dates can become challenging for HR operations unless supported by top management and other related departments such as Finance. HR can efficiently carry out their tasks on schedule and only need to urge management for an early release.

Regards,

Venkata Vamsi Krishna