Salary Revision
Salary revision refers to a comprehensive adjustment to an employee's overall salary structure, including all key components like basic pay, provident fund (PF), and gratuity.
Unlike a salary increment, which usually focuses on increasing a single component, a salary revision impacts the entire package, reflecting market standards and company policies.
Key Components of Salary Structure:
- Basic Pay
- Provident Fund (PF)
- Gratuity
- House Rent Allowance (HRA)
- Special Allowance
- Medical and Travel Allowance
Difference Between Salary Revision and Increment:
- Salary Revision: A complete adjustment to the salary structure, leading to a uniform increase across all components.
- Salary Increment: A percentage increase applied to one component, usually the basic pay.
Common Circumstances for Salary Revision:
- Market Adjustments: When the company’s salary structure does not align with market trends.
- Completion of Probation: Upon successful completion of an employee’s probation period.
- Promotion: When an employee is promoted to a higher role, necessitating a revised salary package.
Frequently Asked Questions (FAQ)
Q. What’s the difference between a salary revision and a salary increment?
A. A salary revision adjusts the entire salary structure, whereas a salary increment increases one specific component, typically the basic pay.
Q. How can I justify a raise?
A. Highlight achievements over the past six months to a year. Research the market rate for your position. Emphasise how the raise benefits the company.
Q. What is considered a good raise?
A. A typical raise ranges around 3%, while a 10%-20% raise is seen as strong, often based on performance, tenure, or other exceptional factors.
Q. How frequently should companies conduct salary revisions?
A. Companies typically conduct salary revisions annually or during major milestones like promotions. However, some companies adjust salaries more frequently to stay competitive in the market.
Q. What factors influence the percentage of a salary revision?
A. The percentage depends on market trends, individual performance, and the company's financial health. Other considerations include industry standards and employee retention goals.
Q. How does salary revision affect other employee benefits like bonuses or stock options?
A. Salary revisions usually focus on base pay but can impact overall compensation. Bonuses and stock options may remain unchanged unless tied to salary adjustments.
