Flipkart will now pay employees a single bonus of 10-15% of their total emoluments or CTC instead of two as it has been doing in the past. The e-commerce firm, which recently raised $1 billion, is also looking to cap the salary hikes. According to sources, the company capped the pay hike in 2016-17 at 25%, down from an average hike of 40% that Flipkart offered in 2015-16. Nitin Seth, COO at Flipkart, however, denied that there was any cap on salary hikes. In 2015-16, the e-commerce firm paid more than R1 crore to 101 employees; six employees received more than R10 crore each. According to RoC filings, employee expenses for FY16 were R1,077 crore, increasing by more than 2x from FY15.
Seth told FE the company has two performance management system (PMS) cycles in a year – in June and December. “The overall approach is to move to one single big (PMS) June cycle,” Seth said. He added, the PMS was a big exercise and a time consuming one. “We decided to move to one single PMS, supported by continuous feedback, because that is what is most important for employee development. In line with that, we will move to the single bonus payout cycle.” Seth also said that there is no plan to buy back ESOPs from employees amidst consistent Flipkart share markdowns and its impact on the value of ESOPs.
Flipkart is known for its employee friendly HR policies. It was one of very few Indian companies to give six months paid maternity leave to its working mothers. It had also introduced liberal paternity and adoption leave/plan recently.
The company currently has 8,000 employees on its permanent rolls and is planning to hire more 1,200 people in its technology and engineering teams in FY18. Seth also said that the company’s Ashford park office in Bengaluru will resume its operation in next two weeks after all the necessary security measures and refurbishing work gets completed. The 500 plus seating capacity has been temporarily vacated by Flipkart after a recent fire accident.
By Sameer Ranjan Bakshi