I want to know about the process of salary increment within a company. Could you please provide me with the details?
From India, Trivandrum
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2From India, Trivandrum
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The process of salary increment within a company usually involves several steps and can vary depending on the organization's policies and practices. Here's a general overview:
1. Performance Evaluation: The first step in the salary increment process is usually a performance evaluation. The employee's work over a specific period (often a year) is assessed based on various parameters such as quality of work, punctuality, teamwork, and overall contribution to the organization.
2. Salary Review: After the performance evaluation, the next step is the salary review. Here, the HR department, in consultation with the department heads, reviews the current salaries of the employees. They consider factors such as the current market rate for similar roles, the company's budget, and the employee's performance evaluation.
3. Salary Increment Decision: Based on the salary review, the HR department decides on the salary increment. This decision is usually made in consultation with the top management. The increment could be a fixed percentage of the current salary or a flat rate increase.
4. Communication: Once the decision is made, the next step is to communicate the salary increment to the employee. This is usually done through a formal letter or email. The communication should clearly state the new salary and when it will take effect.
5. Implementation: The final step is the implementation of the salary increment. The HR department updates the payroll system with the new salary, and the employee starts receiving the increased salary from the specified date.
Please note that this is a general process and can vary based on the company's policies and practices. It's always a good idea to check with your HR department for the specific process followed in your organization.
From India, Gurugram
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1. Performance Evaluation: The first step in the salary increment process is usually a performance evaluation. The employee's work over a specific period (often a year) is assessed based on various parameters such as quality of work, punctuality, teamwork, and overall contribution to the organization.
2. Salary Review: After the performance evaluation, the next step is the salary review. Here, the HR department, in consultation with the department heads, reviews the current salaries of the employees. They consider factors such as the current market rate for similar roles, the company's budget, and the employee's performance evaluation.
3. Salary Increment Decision: Based on the salary review, the HR department decides on the salary increment. This decision is usually made in consultation with the top management. The increment could be a fixed percentage of the current salary or a flat rate increase.
4. Communication: Once the decision is made, the next step is to communicate the salary increment to the employee. This is usually done through a formal letter or email. The communication should clearly state the new salary and when it will take effect.
5. Implementation: The final step is the implementation of the salary increment. The HR department updates the payroll system with the new salary, and the employee starts receiving the increased salary from the specified date.
Please note that this is a general process and can vary based on the company's policies and practices. It's always a good idea to check with your HR department for the specific process followed in your organization.
From India, Gurugram
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Salary increment is purely establishment specific and will change from company to company. But legally, an employee is entitled to get at least the minimum wages as notified by the government. The statutory minimum wages, as it is called, will vary from industry to industry and the rates are available in the website of labour Commissioner, Kerala, provided your establishment is in Kerala (https://lc.kerala.gov.in/en/minimum-wage-notifications). The rates mentioned are basic wages and you have to calculate Variable Dearness Allowance (VDA) equal to the CPI (Consumer Price Index) applicable to your city or cities of operation. The CPI for various months are available in the website of the department of Economics and Statistics (https://ecostatportal.kerala.gov.in/des_portal/cpindex_newseries/cpindex_public_homepage.php)
Now coming to salary increment there are two theories, first to prefix the increment under a time scale and grant it to each employee once he completes a year, second to decide the amount of increment every year after evaluating the performance of each employee. The latter is being followed in all most all private establishments though in respect of workers whose wages and service conditions are fixed by bilateral or tri partite discussions and settlement the former pattern is still available.
While revising the salary, you should consider one thing, ie, salary increment is given for two reasons, viz, to reward the employee for his performance and motivate him to continue the performance even better than the preceding period of evaluation and to compensate the cost of living. The former is given as an increase in basic pay and the latter is given as an increase in the DA. An employer adjusting the Variable DA every month or quarter according to changes in the CPI need not revise the VDA again annually at the time of salary revision but an employer who keeps the salary unchanged over a year should revise the DA part also.
Giving increments on other components of the salary like house rent allowance, conveyance allowance etc are purely a managerial decision and there is no rule for that. Obviously, performance and cost of these allowances (actual compensatory allowances) should be the parameter for that also.
From India, Kannur
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Now coming to salary increment there are two theories, first to prefix the increment under a time scale and grant it to each employee once he completes a year, second to decide the amount of increment every year after evaluating the performance of each employee. The latter is being followed in all most all private establishments though in respect of workers whose wages and service conditions are fixed by bilateral or tri partite discussions and settlement the former pattern is still available.
While revising the salary, you should consider one thing, ie, salary increment is given for two reasons, viz, to reward the employee for his performance and motivate him to continue the performance even better than the preceding period of evaluation and to compensate the cost of living. The former is given as an increase in basic pay and the latter is given as an increase in the DA. An employer adjusting the Variable DA every month or quarter according to changes in the CPI need not revise the VDA again annually at the time of salary revision but an employer who keeps the salary unchanged over a year should revise the DA part also.
Giving increments on other components of the salary like house rent allowance, conveyance allowance etc are purely a managerial decision and there is no rule for that. Obviously, performance and cost of these allowances (actual compensatory allowances) should be the parameter for that also.
From India, Kannur
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(Fact Checked)-Your explanation on salary increments and minimum wage laws in Kerala is accurate and comprehensive. Well done! (1 Acknowledge point)