TCS excludes newer staff from appraisals | The Financial Express

TCS excludes newer staff from appraisals

Those completing first year on April 1 or thereafter will not receive salary hikes; company says increment cycles unaffected

TCS excludes newer staff from appraisals
A letter sent to TCS employees states that those who have completed their first year on April 1 or thereafter will not receive an increment. The company, however, said its increment cycles were unaffected in a statement on Friday.

Mumbai-based IT services major Tata Consultancy Services (TCS) will be handing out appraisals only to their experienced staff and the newcomers who have just completed a year in office will not be eligible.

A letter sent to TCS employees states that those who have completed their first year on April 1 or thereafter will not receive an increment. The company, however, said its increment cycles were unaffected in a statement on Friday.

“We have always had increments in line with industry benchmarks. Even during the pandemic, we ensured our increment cycles were unaffected. It is incorrect to suggest otherwise. All experienced hires will be given an increase as part of the annual salary appraisal that follows their one-year anniversary,” TCS said in a statement.

Also Read: Consumer durable firms ready for festive season, but Covid curbs in Shenzhen remain a concern

The development comes at a time when IT services companies are looking to cut costs due to margin erosion on account of higher employee costs, low graduate uptake, limited increase in pricing, travel expenses, and high onsite inflation.

Employee salaries typically account for about 50-60% of the total costs in IT companies. Higher costs of onboarding and training new employees due to high attrition rates have been impacting margins at most of the IT services companies.

Of late, many IT companies have either deferred or cut the variable pay for the employees. While Infosys plans to roll out 70% of variable pay for Q1FY23, Wipro has reportedly deferred payments for its mid- and senior-level employees.

Earlier, TCS denied media reports on deferment in variable pay and said that over 600,000 of its employees will receive the full variable component for the first quarter.

“We have come across completely incorrect reports on our compensation. Variable pay is either paid in month one or month two as per the normal process and there is no delay in this process. 100% variable pay is being paid for Q1,” TCS said in a statement.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.