The term salary increment refers to the increase in the current salary of the employee based on the performance or years given to the company. This process happens only quarterly, half-yearly or yearly differing from companies or industries. When the employee gets a salary increment, his or her salary gets increased from a specific percentage. It helps the companies in showing appreciation towards the employees for their work and results in positive retention.
As per the statistics, the average yearly salary increment was 9.2% of the private sector in 2023. There are various factors which decide the percentage that an employee deserves as a salary increase:
Their Work Performance: If the work performance of the employee is constantly good and meets expectations, the chances of an increment are high.
Absenteeism rate: The HRM keeps a constant eye on the absenteeism of the employee while working on its increment.
Participation in cultural and social activities: socialising behaviour and work ethics also have a crucial impact on deciding the increment of the employee.
Budget of the company: The budget decides if the company can bear a higher increment or if they have to negotiate it with the employee.
Economic status of the industry: The financial status of the industry also decides the increment rates of the employees in it.
Seniority level of the employee: Employees in higher positions will get less increment as compared to the junior employees.
Maintaining positive feedback: The employee will have to maintain positive feedback from all the seniors to gain a higher percentage of salary increment.
Position’s market value: The market value of the position on which the employee is working also affects the increment ratio.
