Pay hikes in IT? Only for star performers

IT professional Manoj Selvan (name changed on request) would have to wait for some time before he can expect his annual income to increase. The 24 year-old, who works with a leading IT firm in Pune as a programme analyst, has heard through the company grapevine that only the top performers, who have been consistently delivering the goods, would be eligible for any sort of promotions or pay hikes this year. The rest would have to work at the same salaries.

Selvan is sure that he does not fall under the bracket of “top performer” as per his company’s metric, coupled with a not-so-good attendance record. So he will have to work doubly hard to expect some increments in the next season. And, like Selvan, there are thousands who would have to wait it out to see their pay packages swell.

In the IT world, which once saw average pay hikes of over 15%, and even towering to 20%, before the financial crisis set in, this year would be one of utmost caution.

Industry experts say that, although the scenario is improving, the situation is not good enough to warrant pay hikes to all employees. But, companies are meticulous about not letting go of their top performers. And thus, promotions, which would also include some pay hikes in mostly single digits, would be restricted only to the top performers.

These top performers constitute 1-2% of the total workforce in firms like TCS, Wipro, which employ innumerable people, says Kris Lakshmikanth, founder and MD of HR firm HeadHunters India.

“So for the vast majority, there would be no hikes at all.”
Says Saurabh Govil, senior vice-president, HR, Wipro Technologies: “The business environment is yet to see a significant improvement. Thus we do not intend to increase salaries this year. There would also be no change in the variable pay.”

Likewise, a spokesperson from TCS says that hikes would be restricted to those getting promotions only. “But those not getting promotions would get no increments this year.”
However, a spokeswoman of Infosys Technologies told Agencies that the company plans to raise staff pay and give promotions to its employees next month. “Compensation review and promotions are planned in October,” the spokeswoman, who declined to be named,said without giving details. Infosys had in April this year put on hold all promotions and salary hikes for the current fiscal year through March 2010.

According to Prameela Kalive, vice-president &global head, talent management, Zensar Technologies, employees have to understand that the bar for performance will continue to get raised.

Hari T, chief people officer and chief marketing officer of Mahindra Satyam, says the overall market situation has impacted the growth plans of most IT companies, thereby affecting pay hikes based on the business performance for the year. “Most companies may not go ahead with pay hikes this year, but the employees can expect some good news in the future as the markets are beginning to show signs of recovery.”