With the Indian economy headed towards retrieval, several organizations in India Inc are looking at doling out good increments, perks and bonuses this year. This move is backed by a strong growth in earnings reported by corporates in the December quarter. Here’s a look a what HR managers are doing to make the most of these positive developments.
Finally, good times are here again, experts point out. The economy is looking brighter markets are slowing signs of growth and India Inc is all smiles because of a strong growth in earnings recently. As India Inc emerges out of downturn, many organizations are taking a re-look at salary hikes, perks and bonuses. They expect greater demand for top grade manpower and are taking measures to retain them.
With the economy headed towards recovery companies restarting their earlier practice of aggressive hiring. In the New Year as India gears up to fight the economic slowdown and bounce back, companies are re-looking at their compensatory policies and introducing changes for the good. Currently the trend is to emphasis on performance linked incentives. In the year 2010, the salaries seem like they are moving north and most of us are now looking at being marked to the market / competition. At this point, we are waiting to see how the trends pan out so that we can plan our strategy accordingly.
First of all we have to understand that healthcare’s performance has been different from the rest of the industries. It did not have a direct impact due to the recession but the pressure was still there. However, we are again looking at giving better increments and retaining good sets of people. We are working on the kind of increment we are planning to hand out this year. It will vary between 15-20 per cent, in that range. Bonuses and incentives depend on the overall performance of the company.
With the economy starting its journey towards the north, all companies will go for salary revisions during the coming financial year i.e. 2010-11. The results of the Q3 also verify the same. We are also planning to have annual salary revision based upon organizational and individual performance. We are in the individual performance. We are in the process of studying the market trends; based upon the same we will decide our salary hikes. We will continue our past practice of giving salary hikes through fixed increment and increase in performance pay, based upon the performance grid.
Salary hikes are being considered for this year in review cycle. Also, they paid variable pay last year and are likely to pay it this year as well. The hike will be in line with the IT industry’s performance. At Logica, they have a holistic compensation approach that encompasses performance merit, market alignment internal parity etc. Similarly, at Haeir appliances since the annual salary revision time is approaching they are geared towards doing industry benchmarking and will, accordingly take action. The fixed increase would at least be about 10-15 per cent plus the variable component. They have increased budget for salary revision for 2010. They would be looking at healthy growth for their employees. This will be a year which will be different from 2009. So, this year, will have to give good growth opportunities to employees because growth is also evident.
2009 v / s 2010
It is true that most companies are gearing up to offer good increments to their employees. But, how different things really are, as opposed to last year? During the FY 2009-10 they did not give any pay hikes to employees; however fixed bonuses were paid. Like a majority of the companies, during the FY 2009-10 due to the financial pressure and in quest to maintain provision for the future we skipped the annual salary revisions as well. Though we did give out bonus / variable pay, Logica continued other investments in employees and did not stop grooming its best talent. Last year, we also launched a group wide employee recognition scheme to reward / recognize good talent to foster employee engagement.
Talking about the healthcare industry, due to the economic pressure the healthcare industry did have to bear some brunt. This year, however with the market looking up, more and more hospitals are mushrooming, thus giving job opportunities to candidates everywhere. Therefore increments will be much higher than what we gave last year.
Salary hikes are said to be taking place across sectors right from IT and financial services to manufacturing. Healthcare is certainly there. Telecom will also be good and in my opinion, FMCG should also witness positive growth. Keeping the Common wealth Games in mind, even sectors like hospitality and civil aviation will bounce back.