The disparity in the salary increase among homegrown firms and MNCs was the most prominent in both the senior management and the middle management levels.
New Delhi, Feb. 7
HOMEGROWN firms gave out higher salary increments to their employees in comparison to the average hikes received by employees of multinational companies in 2005.
According to Hewitt Associates' Annual Salary Increase Survey, domestic companies saw an overall salary increase of 14.7 per cent, while foreign-owned organisations saw an overall increase of 13.8 per cent.
Employees in the country received an average salary increase of 11.4 per cent to 15.4 per cent last year on a par with last year's increase, the survey adds. Also, employees in the professional, supervisor and technical levels benefited the most in terms of average increments during the year across all the surveyed employee groups, as opposed to the trend during the late 1990s when top management personnel enjoyed the highest salary increases.
"As homegrown companies attempt to be more global and capture larger customer bases domestically and around the world, the need for good talent becomes critical.
"Locally-owned firms are now beginning to align their compensation practices to global standards, strengthen their reward management practices and focus on pay for performance to attract and retain talent, and enhance overall productivity," Mr Nishchae Suri, Asia Pacific Business Consulting Leader with Hewitt Associates, said.
The disparity in the salary increase among homegrown firms and MNCs was the most prominent in both the senior management and the middle management levels. The average salary increase in the senior management was 15.9 per cent in the case of domestic companies as opposed to a 13 per cent average increment given by MNCs during the year.
At the middle management level, the average salary increase was 15.4 per cent in case of locally owned firms as against a 14.1 per cent increment given by MNCs during the year.
"Due to a large region-wide economic upswing and the global attention attracted by India, employers reported a more positive outlook on salary increases across industries in 2005. "Though there has been an upward swing in salaries since 2002, the past two years have seen salaries stabilising with no sudden inflections since 2004," Mr Suri said.
The survey covered 652 companies across 29 industry categories.