Salary Freeze

I was wondering why the employer has to hike his employee’s salary on a regular basis. Why can’t he just be paid the same amount all his life? Will that be such a big issue? Why does an employee need a salary hike year after year? If the employee is not paid any hike this year what would happen to him? I guess it is the economy that plays a dominant role in the salary hikes rather than the performance of an employee.

Salary hikes are given to the employees so that he has got enough spending power and he goes on spending money and thereby boosting the economy. A economy is said to be good only when people spend lavishly and the prices of the goods are in common man’s reach. It shows the sign of prosperity. Most of the companies today are laying off their employees as a measure of cost cutting. This is very new to India. In the western world, company resizing and laying off employees are not new to them and they are very much used to this fact. When I was playing business, there was Chance Card which said, I lost my job n I have to forfeit the turn’s earning. I used to wonder why such a thing exists. Now I know why such a thing exists. It teaches you how to handle the business when things go bad and you don’t get what you expected as earnings.

Business game is a wonderful game; it did teach me as to how to build businesses. It teaches you how to build houses and then trade the houses for a hotel. I guess life is more or less the same. When things were getting bad in the game, I used to convert the hotel to houses and even mortgage the land that I had. That is because of lack of money. When a player used to land up in my hotel, I used to make sure I get back my investment. When the player did not have enough money to pay me then I used to take away his properties and ask him to go out of game.

When I look at the current situation, it is more or less the same. Many people are in a bad state. It might be due to various reasons like deep credit crisis, non performing assets and so on. The salary freeze adds to it. But since the inflation is under control I guess salary freeze should not be a problem. Government should take care of inflation. If that comes down drastically then salary freeze will not be a big thing after all. One of the main reasons for salary hike is inflation. I don’t remember dad telling me that he got a hike in salary every other year. Still, when I was a kid I never had any issues with money or things. Everything seemed pretty much good for me. I got whatever I wanted. These days everything is costly. I used to buy “Menshinkaayi Bajji” for 50 paise when I was in my school i.e. around 8 years back now it costs Rs. 2.

Prices keep changing with so many factors. Government has to ensure that everything goes fine. Chinese government has maintained the price very well. The cost has not varied much for more than 10 years. In such a country I don’t think Salary hike or no hike will be all most the same. If there is hike then the person gets more money to spend that is it else there is no problem. If the price varies like crazy for every year then if there is no hike then it is a mess.

Hope government does something for the citizens so that the salary freeze that is going on in many companies won’t affect the employee. At times I doubt, whether our government is “For the people” ??

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2 thoughts on “Salary Freeze

  1. Ritesh says:

    Saravanan

    I hope you don’t take this in a wrong way, but your first paragraph makes little sense. What do you mean why salary hikes are needed? You write the entire article without mentioning the most important key word – Inflation. Salary increases are given to keep up with the inflation / cost of living.

    And you said our government doesn’t do anything. I don’t agree with that. The inflation rate soared to nearly 13% in August. Due to the drop in prices of oil and other commodities, reduced interest rate from RBI, the inflation has come down to 5% as of last week. Isn’t this doing something?

  2. Saravanan says:

    @Ritesh:

    I don’t take anything in wrong way. 🙂

    I have mentioned about the Inflation. I guess you missed it. Here it is, “One of the main reasons for salary hike is inflation”.

    I never said, Government is not doing anything. I said Government should take care of the inflation. It is the Government’s responsibility to check inflation and keep it in control. Chinese government is very effective in doing so.

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