No Increment - Only DA

Dear Team,
In our Organisation the management has decided that not giving increment to all the employees. They are planning to give only the revised DA amount to all employees. If the employee has file any complaints in Labor Department what should we do..? Is there any rules / Policies we have to follow for giving increment to the staffs..?
Please tell us your valuable comments regarding this.

Dear Paul Samy,

No employee can demand periodical increment or hike in salary as a matter of right unless there is a settlement providing for such hike.

Increment or periodical hike is an important factor in wage/salary administration of an organisation for motivating the employees to keep their contribution to work at optimum level with the passage of time and also to distinguish their seniority in terms of their tenure of service in a perceivable manner. If employees with long tenure of service are paid on par with newly recruited employees, the result is pay compression or salary compression that will end up in low morale. At the same time, no employer will be prepared to hike the salary of a non-performer just because of his longer tenure in the organisation. That is why performance appraisal has come into place. Therefore, increment should not be confused with general hike in salary to off-set raise in prices like dearness allowance. As a prudent employer, if one links the rate of annual or periodical hike with performance and the appraisal is objective, it will certainly motivate his employees to work harder so as to achieve targets if any.

Salary increases are always at the discretion of the employer. Employers may decide to increase salaries after conducting performance appraisals on how employees are achieving their KPI's

True, increments are not a matter of right of employee to receive but a matter of discretion of the employer to grant. However, in industrial practice,increments are given on the basis of performance, the volume of responsibility and the value of contributions and the length of service of an employee. It is a tool not only to compensate an employee for his knowledge, skills, efficiency, responsibility and loyalty but also to retain him.
B.Saikumar

Changing living conditions, cost of living matters a lot in the performance of employees, due to which organisation may face losses. Shouldn't there be law in this regard.

Dear Paul
Your company is trying to give DA instead of increment you accept it
Don't forgotten one thing as per law you cannot be waved from increment..

Dear Mr.Paul,
Annual increments in basic salary are at the discretion of the management. Normally it is linked to the performance management system - achievement of the KPIs/KRAs.
If there exists any tripartite agreement with the union for grant of annual increments subject to fulfilling conditions detailed there in, then it will be automatic if the conditions are fulfilled.
In case of breach in such agreement you can take it before the Labour Department. Otherwise there is no law which provides for annual increments.
bgramesh, hosur