This new structure which will be effective for the current fiscal and is expected to lend more stability to the salary packages, which otherwise had a lot of fluctuations due to the variable component.
In response to a query, a spokesperson from Infosys said, From time to time, we revisit our existing policies to align them with global best practices as they evolve. We have reviewed our existing salary structure and redesigned it to create a simpler variable structure that is geared to reduce variability of compensation for our employees. The changes will be effective from June 1, 2013.
The variable component in Infosys employees varies across levels and it is generally higher for the top executives going up to as much as 50%. This payment is largely dependent on how the company performs and this was amply reflected in the very sharp reduction in the top executives bonus & compensation for FY13.
The mid to lower level employees of Infosys on an average have a variable component of around 20% and it goes higher for the senior personnel to about 40%. Given the current economic situation with the industry growing in the 11-15% range, it had a negative bearing on the employees.
Commenting on the development, Suparna Rao, Co-founder & CEO, Excellence4u, an employee assessment firm, said this would greatly benefit the mid & lower level employes of Infosys, adding that this could also one of the ways for the company to control attrition.
At the end of fourth quarter of FY13, the attrition level of Infosys stood at 16.3% as against 15.3% in the sequential quarter. During the fourth-quarter results, the IT major did not give any clear indication on wage hike for financial year 2013-14. On increments, the Bangalore-based firm pointed out that it will communicate directly with the employees." Usually, Infosys effects appraisals in the very beginning of the fiscal effective April.
However, in FY13, Infosys took a drastic step to withhold wage hikes till it gained more clarity on its business. Later in October 2012, the software-services company doled out an average 6% hike for employees in India and 2-3% outside the country. However, for its onsite workforce, salary increment was implemented from January 1, 2013.