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Increment and Appraisal: Know the Difference

If you are currently working in a company, it is important to know the difference in increment and appraisal before you approach the HR office and ask for a hike in your salary. While most employees want to know about the percentage of their salary hike, the HR manager will probably tell them to wait for the appraisal before he or she can answer their question. If this is your first time to work in a company, you may not be quite familiar with some of these terms. But do not worry because there are still some employees who confuse themselves with the terms increment (salary hike) and appraisal and how each one is different from the other.

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In this article, we will provide you with some essential information that will give you a clearer picture of the difference between the two terms.

Everything You Need to Know about Increment

An increment, which is also known as a salary hike, is basically the amount of salary increase that an employee can receive either every six months or annually. It is usually given to the employee due to an increase or boost in the income of the company. As we all know, an increase in salary can make the members of your organization strive harder to become more productive and efficient in performing their daily duties and responsibilities.

Factors that Affect an Employee’s Salary Increment

There are times when the salary increment of an employee is different from the other. This is because the increase in your salary is often based on the percentage of the overall annual base pay of an employee. In addition to that, most employers use increment to determine whether to boost or deduct the base salary of an employer or to award bonuses to deserving employees.

On the other hand, an increment is also used by the employee in negotiating an increase in his monthly pay or a starting salary. Let us take for instance; when you are applying for a certain position in a company but the employer gives you a salary offer that is five percent below than the normal salary rate, then you can counter it with at least an increase of 5 percent.

  • Market – A salary increment is not usually awarded to the members of the organization when the current condition of the market is unfavorable. Obviously, when the market is not in its best condition, it can affect the overall financial plan for the company that is why there is no point in giving the employees a raise in salary as it can make the company.
  • Economy – When there is economic turmoil, it will greatly affect the growth and profit of the company. Oftentimes, the employers with resort to stabilization and retrenchment of employers to cut down the expenses and keep the company to stay afloat.
  • Income of the company – A lot of times, a company does not give a salary increment to its employees due to unsteady income. Only then the company can provide its members with an increment in salary if its income is in the rising.
  • Performance – If the quality of the performance of an employee can play in determining the amount of his or her salary increase. If the employee is able to keep up with his or her daily assignments and is able to achieve his or her target goals, then it will guarantee the employee an increase in salary.
  • Skills and Experience – The number of years that the employee has been in the service, along with his or her skills, can be factors that determine the amount of the salary hike.

Everything You Need to Know about Appraisals

According to an article that is published on the Wikipedia website, “a performance appraisal (PA), also referred to as a performance review, performance evaluation, or employee appraisal is a method by which a job performance of an employee is documented and evaluated”. Additionally, a performance appraisal can also be considered as a part of the career development of the employees. Companies often conduct performance appraisal as their method to justify salary hike and bonuses to be given to the members of their organization. Aside from that, the performance appraisal will also determine whether there are enough grounds to terminate the employee.

Advantages of Conducting an Employee Performance Appraisal

Aside from being able to determine the percentage of the salary increase, there are a couple of amazing benefits that come with a good employee performance appraisal.

  • Potential Job Promotion – Aside from the monetary bonus, an employee with a flawless work performance is likely to earn a promotion. Since most companies offer promotion programs, a performance review can help them weed out underperforming employees from the program.
  • Compensation – Employees who do not qualify for the compensation package offered by the company is determined by a performance appraisal. Oftentimes, the compensation package includes a higher salary increase, incentives, and extra benefits depends on how well the employee has been functioning in his role for a given period of time.
  • Motivation – A lot of employers consider performance appraisal as a motivational tool that makes the organization members strive harder to become more efficient and gives the best of their abilities to perform their daily duties and responsibilities. And since a performance appraisal provides a comprehensive and honest feedback on the employee’s performance, the manager is able to identify which areas that the employee needs help. Usually, the manager will schedule a training for the employee to help him improve his work ability.
  • Open Communication – A performance appraisal is seen as a great communication tool that can benefit both the employer and the employee. If both parties are able to communicate regularly, it makes it even easier to build a strong employer-employee relationship and keeps both parties on the same page.

So, there you have it. Now that you know the difference between an increment and appraisal, we hoped that we have provided enough details on how each one is different from the other so that it can be helpful when you come across the terms increment and appraisal.







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