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India Inc`s top talent gets 17% salary hike

Views 1 Views    Comments 0 Comments    Share Share    Posted 16-07-2009  

NEW DELHI: Employees who were above average in their performance have received 12-17% salary hike by India Inc in 2009 despite the negative sentiments which forced some companies to cut salaries, says a survey by HR consultancy firm Hewitt given exclusively to ET. Only one in six companies surveyed said that they had opted for a salary freeze for 2009-10 and just 6% of the companies said they had reduced salaries.

As per the mid-year survey, around one-third of the employees across 137 companies representing nine sectors surveyed were rated as those who exceeded expectations in performance. The remaining set of employees who were rated as average or below-average performers had to settle for lower salary hikes, almost half of the increment given to the top performers.

“The overall merit increase has been 12-17% for top performers. The salary increases awarded to this category are almost two times higher than that provided to employees who meet expectations,” the survey pointed.

The survey, which assessed the actual salary increases in companies this year, also revealed that sectors such as pharma, manufacturing, telecom and FMCG doled out highest salary increments to their employees.

For instance, while the pharma and manufacturing have given on an average a 11% salary hike to employees, telecom and FMCG have given more than 9% salary increments.

“It is important for a company to communicate to its employees that even in the days of slowdown, if the sector or company is better off, the employee contribution towards the growth of the company will be duly recognised. This can be by way of salary increases, coupled with other non-monetary incentives,” said Max India group HR director P Dwarkanath. He added that companies recognising the importance of differentiating between performers and the rest is a healthy practice.

The sectors that have given the lowest salary increments include IT (3%), ITeS (4.4%) and financial services (a little more than 5%).

The survey also pointed that around one in every three companies surveyed have deferred their salary revision cycle by 3-6 months. This means, instead of revising salaries in March-April, a few companies have delayed salary revisions till July or October. This could also mean that many companies are yet to announce salary increments for their employees for this year.

“Many companies had deferred their plans to increase salaries in the month of April to first assess the first quarter results and then take a decision,” said Hewitt performance and rewards practice leader Sandeep Chaudhary.

The survey also highlighted that corporate India is increasingly focusing on measuring and assessing performance of employees, retaining talent and motivating their workforce.

“Even in the time of low growth, companies are facing challenge to retain and motivate their top performers. Thus, organisations are restoring to ring fencing of top talent with twice the salary increase as compared to ‘meets expectations’ performers. In fact, quite a few organisations are considering a salary increase only for their top performers for the year 2009-10,” added Mr Chaudhary.

The survey also said that only 5% of the respondents indicated that they were considering lay-offs during 2009-10, which indicates that most of the companies have right-sized their organisations in the last few months. “Companies are now focusing on the existing set of people, identifying their capabilities and building leadership teams,” Mr Chaudhary said.

Source:
http://economictimes.indiatimes.com/News/News-By-Industry/Jobs/India-Incs-top-ta
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