Is It Legally Required to Give Salary Increments After Performance Appraisals? Let's Discuss

Performance Appraisal

Performance appraisal is the process of giving feedback, identifying strengths and weaknesses, as well as determining the job responsibilities for employees in the future. The results of such appraisals can be the basis for giving increments to employees. Giving an increment is an organizational choice, and accordingly, the rise in salary can be decided based on the company's profitability, employees' productivity and performance, market trends for certain skills, and the inflation rate, etc.

Is Giving an Increment Mandatory by Law?

Is giving an increment mandatory as per law? If so, then which law governs the same? Request your views and comments on the same.

Granting of an annual increment is not mandatory as per law. Your observations in the matter are valid and proper.

Agreed, it is not mandatory as per law. You need not give an increment after every appraisal, but make sure that the employee is happy and retained in your organization or anybody's organization.

There are always options for the employee who is trained here to be poached in a similar setup with a good package. Avenues for employees are aplenty now.

Also, the performance appraisal system should be such a tool that it leaves no option for the employer and employee in respect of their growth and development either professionally or financially.

Thank you for responding to all the members. I encourage other knowledgeable and experienced members to share their perspectives and provide further insights on the subject.