I believe there is no such requirement for giving a hike on annual basis, the best way to decide on this question is to just follow your instincts. If you believe that the employees really worked hard and added contributed positively to your business than they deserve a piece of appreciation and motivation from you. Good luck

I agree with MAVENSplanet. There are not laws requiring salary increases after the first year or at any time. There tends to be cost of living adjustments but those are also optional. Increases in salary need to be related to hard work and positive contribution to your business. Also remember that if you do not give an employee a raise you should explain what he or she need to do to get one. Avoiding the topic will lower moral. Jim

I believe there are no laws. But company can make their own inhouse laws that dont violate any provision in the labor code or just provide their own clarification/interpretation of an existing laws. In the last company I work with. Every department staff is allocated with a 5% increase. It is then up to the managers how he/she will endorse them after the appraisal. For example if you have 2 staff and 1 staff get 8% then the other will be getting only 2%. An exception to this is that manager can go below this allocation but are not permitted to go above the allocation. This is done to reward those who have been an asset to the company.

I am still confuse like one employee old but non performer but as per rules and discipline he is fine like coming on times, no personal work at office time in against of him another new guy good performer but no discipline like coming late, doing personal work in office hours (so many times warning also given) but still doing personal. So my question is to whom should i give increment? or not to any one? As both are troublesome for company.

Unless its written in their contracts you can choose when, how and for whom to do it. I think that this whole subject is very important element to every business because it has so many effects to your business - Not only to what will be the direct employee reaction but also how others will react to that. This can be a great tool for incentive but also if you don't use it properly it can decrease the moral of the employees.

There is no contract we have given to employee that you will get increment after this much period. Also there is chagne in there work attitude as i have not given increment to old employees. Also new employee performing well so asking for increment within 6 month. So i am confused what to do? so shall i tell them we dont need you, give regisnation? Not possible for us to give increment as profit margin is nothing good.

It's important to have a writtenpolicy that addresses increases in pay so that all employees know what to expect. That said....... Some companies provide annual across the board COLAs (cost-of-living-adjustments) based onthe rise in inflation.This practice is seldom used anymore. One reason is that inflation has generally been flat. Another, and more significantreason is that employers and employees alike believe it is unfair to reward uneven performance with equal increases. Many companies tie pay increases to performance and these daysthe highest percentages I've seen are 2%-3%----provided in increments of .5% based on performance and contributions to the company. As you might imagine, the percentageprovided sends a loud message to the employee and, as a contributor recently stated, it's important to let those receiving the smallest percentage learn what they must specifically do to earn a higher percentage. Because of the very difficult economic times, many companies are freezing pay increases altogether but providing one-time bonuses to employees who have significantly contributed to operations, revenue and profitability. This practice best serves the business because: it shows employees that hard work is rewarded; it doesn't tie the business to sustained increased costs; because it is a one-time event, it can be as high as the employer would like (understanding that whatever is provided sets a precedent for future bonuses), usually based on the amount of profit available. Two things to keep in mind, though, are: base pay should be the same for people with the same skills doing the same work; you will want to justifyany increase or bonus with hard data in case a claim of pay discrimination is filed against you.

I agree with your statement that providing one time bonus to employees, it shows that those who do work hard has been rewarded.

One of the ways is to put the aims for each employee and make the evaluation of progress periodically. The hike value simply could be based on this...

I think its best if you set your own guideline. Since no 2 same person can act or contribute the same way. to something like this Performance - 50% (for me this is one of the most important factor as this generate income) Attendance - 20% (Tardiness) Professionalism in the workplace - 30% (How he act in the office, willingness to go to over time) its just an example but I know some company have more like educational background, seniority, etc ... You need to establish a grading system so that when they do complain you have some facts to back your decision, this is to prevent you from being baised.