If shareholders were disappointed with Infosys not announcing a special dividend by the end of the September quarter, employees definitely have something to cheer about the IT major's massive cash pile.
Talk of Infosys wanting to pay its employees better after a wage hike last year emerged during the earnings call last week. Today, a report in The Economic Times says Infosys is planning to give its top performers a higher variable pay in an attempt to boost morale and bring down attrition.
Among its rivals, Cognizant hands out fat bonuses for high performers.
In the September quarter, Infosys made an unusual provision - of about Rs 130 crore - to pay bonus as it looks to reward its best employees before the end of current fiscal, the ET report said.
"Besides rewarding outperformers, the decision to pay bonuses is seen as a strategy to raise employee morale at a time Infosys is struggling to retain talent," the report added. (You can read the full ET report here)
Last year, Infosys lagged peers in growth after which it ruled out any hike in salaries. Following this decision, in September 2012, Infosys reported the highest annualised attrition among peers - 17.3%, up from 15% a year ago.
Post the September 2013 earnings announcement, Infosys Chief Financial Officer Rajiv Bansal reiterated that the company's current focus is to reinvest in the business and its people.
The change in strategy from margins to growth comes after co-founder NR Narayana Murthy returned to Infosys as chairman in June. Within days of making a comeback, he announced an unexpected 8 percent average wage hike and set the tone for a merit-driven culture.
The company reportedly alsoimplemented a new salary structure with a lower variable pay component to reduce uncertainties for employees.
Currently, employees with top ratings receive 50-90 percent of their variable pay while those with lowest rating get only 30 percent.
Meanwhile, thecompany would go slow on its campus hiring plans this year and would also consider doing 'just-in-time' hiring. This means instead of hiring freshers in one go, the company would hire them as and when there is a requirement.
Published Date: Oct 21, 2013 11:26 AM | Updated Date: Dec 20, 2014 23:34 PM