Salary Increment

Salary increment, also known as a pay raise, salary increase, or wage hike, represents movement upwards or increasing an employee's base salary or compensation package. Salary increments may be granted to employees for different reasons, including performance acknowledgment, merit-based pay, cost-of-living adjustments, promotion to higher positions etc. This is meant to help employees to align their salaries with market trends, industry standards and inflationary pressures. Raises are often communicated through formal procedures such as performance appraisals, salary reviews, or contractual negotiations and may be subject to organizational policies, budgetary constraints and approvals.

Example of Salary Increment

An employee who is a senior software engineer in a technology company gets a salary increment as a result of the company’s annual performance review and compensation adjustment process. The worker has shown exceptional job performance, performed an important role for the success of the project, and exceeded performance expectations for the last year.

In the meeting with his manager during the performance review session, the employee gets positive feedback about his achievements, technical skills, teamwork and leadership qualities. The manager lets the employee know that they will get an 8% rise in salary as a recognition of their sterling performance and to retain their talent in the organization.

The salary increase can be seen in the next paycheck of the concerned employee, accompanied by a formal notification letter or email from the HR department, which has confirmed the salary change. The employee is thankful for the recognition and reward and commits to the organization even further with increased motivation and devotion.