Infosys to start next appraisal cycle as pending hikes drag on

Infosys is set to start a fresh appraisal cycle this week for the current fiscal year, even as four employees told ET that they are still awaiting hikes for the previous performance cycle.

The country’s second largest IT exporter will start its ‘performance review cycle–October 2023’ with self-evaluation on September 29, according to an email sent to managers. Manager evaluation will happen by October-end while rating will be communicated to individual employees in the first week of December, said the email, a copy of which ET has seen.

This evaluation is for performance between October 2022 and September 2023.

Two employees told ET that while the fresh appraisal is on the cards, they did not receive any hikes for the previous appraisal cycle (October 2021 to September 2022). Also, there is no clarity whether the pending hikes would be clubbed with the upcoming cycle or skipped, they said on the condition of anonymity.

"We need to update our self-evaluation and accomplishments soon … Last year too the appraisal process happened and ratings were disclosed. But the hike (salary revision) has not been released yet. It is usually paid in June-July," one of them said.

Queries emailed to Infosys did not elicit a response till press time Tuesday.

During the earnings conference after the first quarter, chief financial officer Nilanjan Roy said that rolling out annual hikes was under “active consideration.”

The Indian IT industry has been under pressure after macroeconomic conditions globally led to a squeeze on technology spending.

During the pandemic year of 2020, Bengaluru-based Infosys is said to have frozen salary increases to conserve cash, but had rolled out hikes in January 2021.

At cross-town rival Wipro, hikes for FY23 are delayed by a quarter and will be paid in the December-ended quarter, outgoing CFO Jatin Dalal had said on an analyst call in July.

Industry leader Tata Consultancy Services, however, had announced annual hikes for FY23 with effect this April, with salary increases of 6-8% on average and 12-15% for "exceptional" performers.

Last month, Infosys rolled out an average 80% quarterly variable pay for its employees for the first quarter-ended June.

At Infosys, a typical evaluation period is from October to September and the hikes are usually paid in June or July of the corresponding year, the employees ET spoke with said.

“Previous hikes were paid in July 2022. We have received ratings for the previous period (Oct 2021-Sept 2022), but hikes have not been reflected in the salaries,” a third employee said.

For the June-ended first quarter, Infosys posted a nearly 11% increase in net profit at Rs 5,945 crore and a 10% rise in revenue at Rs 37,933 crore, but missed analyst estimates. It slashed the revenue growth outlook for the fiscal year, citing spending cuts and delays in decision-making by clients.

The company had pegged 1.0-3.5% revenue growth for the ongoing fiscal year, making it the slowest expansion in at least a decade. However, Infosys has also been leading among peers in terms of winning mega deals — four in the range of $450 million to $2 billion over the last four months — that may trigger an upgrade in the annual guidance.

Infosys is set to announce its fiscal second-quarter results on October 12.