New Delhi: India Inc will dole out an average pay hike of 12 percent across sectors this year, according to consulting firm Mercer's All Industries Total Remuneration Survey. A total of 734 organizations participated in this survey which included representation from 7 industries including pharmaceutical and medical equipment, auto, chemicals, consumer goods, manufacturing, hi-tech (telecom, IT) and oil and gas.

Among the surveyed industries, the pharmaceutical sector expects highest salary increments at 12.5 percent, while the high-tech sector is expected to give the lowest increments at 11.5 percent. Other industries including chemicals, consumer, oil & gas and manufacturing and engineering project a 12 percent salary hike. The auto sector has projected a decrease in salary increments from actual increments of 12.5 percent in 2012 to projected increments of 12 percent in 2013.

About 72 percent of the respondents indicate recruiting for new positions and attrition backfill over the next twelve months, though there is a 12 percent decline from hiring intentions in 2012.

"Corporate sentiment is cautiously positive, though companies are adopting a wait-and-see policy. Our research suggests that companies are not looking at holding back increments in 2012, but are likely to be more selective," Muninder Anand, director for Mercer India's information solutions business said in a statement. "Performance based pay and rewards will gain prominence in the appraisal cycle. Hiring will still continue to be on the agenda for most companies in 2013," he added.

There is an increase in variable bonus pay across industries from actual payout of 19.2 percent in fiscal year 2011 to a projection of 19.30 percent in fiscal year 2012. Actual variable bonus percentage (of annual guaranteed cash salary) was highest for the hi-tech sector in 2011 at 25.50 percent followed by the oil and gas sector at 20.6 percent and consumer at 20.3 percent. Hi-tech and pharmaceutical sectors continue to lead projected variable payouts in 2012 at 25.70 percent and 23.50 percent respectively.

Anand says the difference between performers and non-performers has widened over the past few years and that someone with a rating of 2 may not get anything now which was not the case a few years ago. The focus is on pay for performance. "Companies are increasingly moving employee compensation away from a fixed-pay approach to one that relies more on variable compensation. Many employers are considering a total rewards approach to compensating employees," Anand added.

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