Pay for performance is key differentiator in salary increments

The average salary increments in India this year are in the range of 10-15 percent across industry, according to the Kelly Services India Salary Handbook 2008-09. These increments are relatively lower than the salary increases over the last few years, indicating a consolidation across sectors.
The salary handbook indicates that the salary range for the covered positions has widened and this is attributed to a greater emphasis on pay for performance. Over and above the standard annual increments on base salaries for all employees, across levels and functions, organizations are more open to rewarding their key performers and talent with rare and sought after skill sets and experience.
The Kelly Services India Salary Handbook captures the salary range and job description for more than 100 unique positions in sales and marketing, IT, ITeS, HR, office support, banking and financial services and engineering, amongst others. The salary range data is compiled from actual Kelly transactions with candidates in over 10 cities, across leading industries in India.
According to the salary handbook, even non-sales related functions in the banking and financial services and IT, ITeS sectors have a much wider salary range as compared to previous years. Yearly increments are now being renamed 'merit increments' and salary increases are no longer inflation, function or industry dependant. There is a closer link between salary increments and the performance of the individual over the past-appraised period. Even base salary, in addition to incentive or variable pay, is being linked to the performance and potential of employees.
Although the first wave of the slowdown in the US economy is being felt in single digit salary increments in the IT and ITeS industry, specialized skills in the IT industry continue to be in demand and organizations are willing to pay higher salaries to attract talent and above average increments to retain them.
“Higher employment will continue in sectors like insurance, financial services, healthcare, retail, hospitality and real estate as well as in the growing and diversifying service sector. We expect an increased demand for talent with relevant industry work experience and also with specialized skills across functional verticals in the year ahead.
These would include professionals in marketing and business development, engineering, finance, IT software, research and medicine,” stated Rajiv Mehrotra, GM, Kelly Services India.