How Are Companies Handling Annual Salary Raises During COVID-19 Challenges?

What are companies doing about the annual salary raise in this COVID-19 situation?

Companies have been approaching annual salary raises differently in response to the challenges posed by the COVID-19 situation. Some companies have decided to freeze salary increases temporarily to manage costs and ensure business continuity during these uncertain times. Others have chosen to proceed with planned salary raises but may have adjusted the timing or amounts based on their financial situation. Additionally, some companies have shifted their focus towards non-monetary rewards and recognition to motivate employees in lieu of salary raises. Overall, the approach varies depending on each company's unique circumstances and priorities during this challenging period.

Impact of COVID-19 on Annual Salary Increments

This issue depends on the company. Some companies may follow the previous year's practices, while others may not. The company I am currently working for has decided to defer the annual salary increment to next year. Therefore, we are all working with the same salary as we had last year.

Performance Appraisal Policy During COVID-19

If you have a very good performance appraisal policy in place, you can initiate a performance appraisal review for the year based on your employees' anniversary date. Awarding an increment, subject to their good job performance, is a decision of your management. If management agrees, you may initiate the same process as in the previous year.

If your management does not want to award any increment or salary rise to your employees due to the COVID-19 pandemic, you can defer the increment now and make it effective in the next year. Performance appraisal forms could be filled in, reviewed by a higher authority, approved by the Chief Executive, and kept in the employee service record.

Handling Anniversary-Based Appraisals During Financial Uncertainty

When we have anniversary-based appraisals, if we defer raises effective August or give minimum raises effective August, it will become unjustified when compared to employees who have already received raises from January to June. At the same time, the company will not be able to guarantee employees (whose raises are pending from August) on giving pro-rated raises when the situation returns to normal. How to deal with such a sensitive and monetary situation?

When you put up a query for receiving comments or views from Cite HR members, you need to elaborate on what practice was followed, what the current practice is, etc. (whatever information you can supply, please do) because this will help us to consider while preparing a reply.

Now, coming to your reply, if your management implemented annual increments or salary hikes from January to June, then please follow the same pattern from July to December 2020 as well.