Publication : The Hindu Business Line
Date : 13 June 2009
Bangalore, June 13 – For the 1,800 employees of Quest Global, a Bangalore-based software firm with interests in aerospace, manufacturing and engineering services, the fact that the company has frozen salary hikes this year is ‘no disturbing news’.
That’s because the good news has come in the form of a year-end performance bonus, which is almost 15 per cent of their annual compensation.
“Though the company grew by 70 per cent last year, we decided to freeze this year’s hikes to keep our direct costs flat.
“This also helped us to keep the employees engaged during the slowdown and share rewards with them for overall organisation performance. In addition, employees were secure with notional CTC hikes for calculating next year’s increments,” says Mr Natarajan Iyer, Vice-President (HR and Administration), Quest Engineering & Software Technologies Pvt Ltd.
Ms Gangapriya Chakraverti, India Business Leader, Information product solutions, Mercer Consulting (India), says many companies have resorted to such creative and innovative reward systems to keep their fixed costs low during the year.
Companies have also become more perceptive about individual employee needs and are looking at mass customisation in the reward system. “Employees now have a choice of working out their compensation packet depending on their needs. For instance, a 21-year-old may want a higher cash component than a senior employee who may be looking for higher medical benefits or retirement benefits,” she says.
Ms Hema Ravichander, Strategic HR Advisor, says giving one-off increases is a step in the right direction. “The company is also sharpening its performance differential and reinforcing a high performance work culture.”
“We will see stagnant salaries this year too. This careful and cautious reward system will continue through the year. In future we may also see salary increases that are close to the GDP growth,” according to Ms Yeshasvini Ramawamy, Director, People Practices, e2e Business Solutions.