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.