Average Appraisal In India Is 9%, Highest Among Major World Economies

Received your appraisal letter? How much is it? If it's above 9 per cent, congratulations -- you're better than the national average. If it's 9 per cent, well done -- you are in line with India's corporate landscape.

According to a report by Aon, titled "Salary Increase & Turnover Survey 2025-26", India stands out with highest salary increases (on average) among major world economies.

India Tops The World In Salary Hikes

The salary increase figures (above) include both salary correction and performance-based increment. 

Which Sectors Are Paying The Most?

Sectors linked to infrastructure, manufacturing, engineering and NBFCs are leading. However, tech consulting is surprisingly at the bottom, as per the bottom. Speaking on it, Roushan Singh, senior software engineer, said, "Appraisal in IT domain is not symmetric across all companies. Where some companies are delaying hike due to AI trend, some companies are trying to retain talents with good hike. Generally, 10-15 per cent hike yearly is considered good in IT industry."

He added, "Low perfomers are offered increment in the range of 2-4 per cent, high performers get about 6-10 per cent, and above 10 per cent is reserved for exceptional performance."

The Aon report also notes that juniors get the highest average hikes. As per HR experts, retaining juniors is cheaper than replacing them.

Ironically, high hikes often follow high exits. These sectors are bleeding talent:

Photo Credit: Data From Aon Report 2025-26

Notably, the attrition level is at its lowest level in the last five years. "Employees are starting to prioritise meaningful pay progression, role clarity and performance recognition over aggressive job-hopping," says Roopank Chaudhary, partner and rewards consulting leader, Talent Solutions, India, Aon.

What Is A "Good" Hike In 2026?

Roopank says expectations are now realistic: "8.5-10 per cent is broadly considered a good hike. Employees are looking at real purchasing power, not just numbers. Increments are becoming more differentiated." He adds that sectors like real estate, NBFCs, engineering design and automotive are prioritising critical skills over uniform hikes.

Saikiran Murali, Founder of Workline, notes: "Median hikes are 10-12 per cent. But high-growth firms are offering 15-18 per cent, and sometimes 30-40 per cent to stay competitive. That may not be sustainable in the long term."

Why ESOPs Are Entering Appraisal Conversations

Aarti Nabh, CHRO at M1xchange, says employees are asking a new question: "Not what is my increment, but what does the company's growth mean for me?"

At her firm, 10 per cent of employees already hold Employee Stock Ownership Plans (ESOPs). Because long-term wealth sometimes beats a 2 per cent higher increment. ESOPs are employee benefit plans that grant workers ownership interest in their company in the form of stock. 

Shift To Performance-Linked Pay

Balasubramanian A from TeamLease Services explains: "Hikes are now tied to skills, productivity and business impact. The question is not 'how much', but 'for what'." Hiring is capability-led, so are increments, he added.

Adding to this, Upasana Raina of GI Group Holding says increments are data-driven for companies, but emotional for employees. "For employees, salary hikes are personal. Lifestyle, inflation, family needs and self-worth shape how a 9 per cent hike feels... Generational differences also shape how increments are perceived; what feels reasonable to one group may seem inadequate to another."

The report also mentions the "wage code effect". From November 21, 2025, India's new wage rules require Basic + DA to be at least 50 per cent of CTC. As per the survey, 73 per cent organisations are still figuring out how to fund this. This could change your tax outgo and take-home, even if your increment looks fine on paper.

So, Is Your Appraisal Good?

• Below 6% -- likely performance flag or sector pressure
• 8-10% --  you are in the national sweet spot
• Above 12% -- you are in a high-demand role or high-growth firm
• 30%+ -- you probably switched jobs

"Professionals who proactively reskill and align themselves with emerging business priorities are not only commanding better appraisals but also faster career progression," said Monica Mishra, CHRO, Fibe. 

On this Labour Day (May 1), the message is simple: Appraisals are no longer about uniform raises. They are about skills, sectors, and strategy. And sometimes, about knowing when to stay... and when to switch.