A big controversy has arisen after the announcement of 5% salary hike in Tata Consultancy Services. Many employees claim that after receiving the appraisal letter, their take-home salary reduced by Rs 3,000. Questions are being raised regarding CTC Structure change, Variable Pay reduction, Gratuity Removal and new Labor Code. Has a new era of ‘Hidden Salary Cut’ started in the IT sector?
TCS Salary Hike: Tata Consultancy Services i.e. TCS, one of India’s largest IT companies, is currently in the news regarding the increasing dissatisfaction among its employees. The company had recently announced an average 5 percent appraisal hike, but many employees claim that after the implementation of appraisal, their salaries got cut instead of increased. Some employees even said that their monthly salary has reduced by around Rs 3,000. Despite the company announcing an average 5 percent pay hike, many employees claim that their take-home pay has reduced instead of increasing.
Did you get appraisal or was your salary cut? Increased confusion among employees
According to TCS employees, the situation appeared contrary to expectations after the new pay revision implemented from May 18. Employees felt that an average increase of 5 per cent would improve their monthly income, but many found that the actual benefit in their revised pay structure was very low. Some employees alleged that their annual packages were seeing a decline of Rs 1,000 to Rs 10,000. This situation has especially affected those employees who were placed in B and C category in performance appraisal. They say that even after the appraisal, their financial condition remained the same or became worse.
The real game of CTC? Confusion increased due to removal of gratuity
According to reports, the biggest reason for this entire controversy is the changed CTC structure of the company. It is being told that this time TCS has separated the gratuity portion from the “Cost to Company” (CTC) of the employees. However, the company says that the benefit of gratuity has not been stopped, but has been kept in the internal structure. This change became a cause of confusion for the employees. Whereas earlier gratuity was included in the total CTC, now it is not visible in the new structure. In such a situation, many employees feel that their total salary has been reduced.
Controversy also arose over variable pay, bonus added to ‘work from office’?
The employees have alleged cuts not only in basic salary but also in “variable pay”. Some employees claim that the variable pay earlier received every month is now being changed to quarterly or annual payment. This is having a direct impact on the monthly take-home salary. Not only this, some employees also alleged that now bonuses and performance pay are being linked to following “work-from-office” rules. This means that employee incentives may be affected due to reduced office attendance.
A+ employees fight, anger among other employees
While low performing employees seem dissatisfied, employees with high performance ratings have benefited well from this appraisal cycle. Many employees with A+ ratings have said that they will get double digit hikes. At the same time, A category employees also got comparatively better increase. But B and C category employees say that the increase in their salaries is very less compared to inflation and tax cuts.
Controversy came amid pressure on IT sector
This entire controversy has come to light at a time when the Indian IT industry is facing challenges like global economic pressure, reduction in client spending and project delays. Companies like Infosys, HCLTech and Tech Mahindra are also adopting a cautious approach regarding salary hike. TCS has clarified that the new pay structure has been prepared in accordance with the “New Labor Code” and its objective is to protect the take-home salary of the employees and to facilitate tax savings. The company also reiterated that it will continue its tradition of giving salary increases every year. But at present, a big question is echoing in this IT giant company with more than 5.84 lakh employees – “If appraisal has been done, then why was the salary reduced?”