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http://in.rediff.com/money/2004/jan/29salary.htm

Salaries in India set to rise in 2004: Hewitt

A Correspondent in Mumbai | January 29, 2004 15:11 IST

Good times await the salaried class in India during 2004.

At least this is what a survey conducted by global human resources
outsourcing and consulting firm Hewitt Associates indicates.

The eighth annual India Salary Increase Survey says that India's
employees had something to cheer about in 2003 -- when compared with
their plight in 2002 -- with salary increases ranging between 9.5 per
cent and 12.6 per cent.

The figures reflect a reversal in a six-year trend of declining pay
increases, says Hewitt.

For 2004, the Hewitt study projects that the average salary increases
will range from 9.7 per cent to 13.4 per cent across all employee
groups.

Between November 2003 and January 2004, Hewitt surveyed 521 foreign
owned, locally owned, and joint venture organisations across 23
industries representing about 650,000 employees.

The comprehensive regional survey measures actual and projected salary
increases and compensation practices for five employee groups:
senior/top management; manager; professional/technical/supervisor;
clerical/support; and manual workers.

The survey found that salary increases ranged from 9.5 per cent to
12.6 per cent in 2003, as compared to increases of between 7.7 per
cent and 10.9 per cent in 2002.

Chennai reported the highest average salary increases of 13.5 per
cent, followed by Bangalore and Kolkata, with increases of 12.5 per
cent and 11.5 per cent, respectively.

The study also found a drastic reduction in respondents projecting the
need for a salary freeze at 0.2 per cent in 2004, compared to 4 per
cent in the previous study.

"A robust GDP growth and higher business confidence are the two
critical factors that have led to the higher average salary increases
in 2003," said Nishchae Suri, Hewitt's India business consulting
leader, said in a media statement.

Professional/supervisor/technical group luckiest

Employees in the professional/supervisor/technical group enjoy the
highest average salary increases for the fourth year in a row, of 12.6
per cent.

This same employee group is projected to earn the highest salary
increase in 2004, of 13.4 per cent.

In 2004, senior/top management can expect an average pay rise of 11.8
per cent, managers may look forward to a 12.7 per cent hike,
clerical/support staff may get 12 per cent more, and manual workers
can take home 9.7 per cent extra.

ITES employees emerge winners

Among the various industries, the IT-enabled services industry -- call
centres, medical transcription firms, and back-office operations --
handed out the highest average salary increases in 2003, of 13.8 per
cent.

Other sectors that enjoyed higher than average increases in 2003 were
software development (13.7 per cent), IT solutions provider (12.8 per
cent), freight/shipping/logistics (12.7 per cent), healthcare/medical
products (11.9 per cent), and entertainment/communications/publication
(11.5 per cent).

Banks, financial services logged lowest hike

Industries with the lowest increases in 2003 were banks, financial
services, insurance, and engineering/power/construction with increases
of 7.6 per cent, 7.8 per cent, 8.2 per cent, and 8.3 per cent,
respectively.

Performance linked pay, a big incentive

The Hewitt study also showed that the linkage between pay and
performance is getting stronger. The results revealed that an
outstanding performer typically earns more than twice the salary
increase earned by an average performer.

Nearly all (85 per cent) of respondents reported having a variable pay
plan in 2003. Specifically, the senior/top management group accounts
for the largest share of variable pay, at 18.4 per cent, which is a
jump from last year's 16.5 per cent.

This is expected to rise to more than 19 per cent in 2004.