According to a revised strategy to clearly demarcate performers from other non-performers, Infosys will not provide annual salary hikes to a part of its workforce, beginning this quarter, says a news report.

Richard Lobo, Executive VP, Head HR has been quoted saying in the report, “There will be a percentage of people who will not get anything this year... Today, one does not have the flexibility to give out lots of money.”

The development is a part of a new strategy that will make yearly increments contingent on performance. The news comes just a week after Infosys had announced hiring plans for 20,000 new employees this year. While the IT sector is witnessing turbulence amid slowing growth rate, sweeping changes in the skill requirement, unfavourable global policies, and advent of automation, Infosys had assured that it was smooth sailing for the company. 

The organisation, however, confirmed that high-performers will get better salary hikes, which might as well go into double digits. Infosys also maintained that a majority of the employees will receive a single digit hike at least. The company has already postponed the annual salary hike from April to July, deviating from its own norm, states the report. Emphasising that the scrutiny on performance isn’t going to go down any time soon, Lobo said, “We need to make more number of our employees billable faster... there is a high focus on retaining the high performers in the company and the attrition rate in this category has come down to single digits.” Overall, Infosys saw its attrition rate coming down from 14.9% in the third fiscal of last year to 13.5% in the last fiscal, the report explains.

Emphasizing that the scrutiny on performance isn’t going to go down anytime soon, Lobo said, “We need to make more number of our employees billable faster... there is a high focus on retaining the high performers in the company and the attrition rate in this category has come down to single digits.”

Overall, Infosys saw its attrition rate coming down from 14.9% in the third fiscal of last year to 13.5% in the last fiscal, the report explains.

The development shows that major IT players are under severe stress. With over 2,00,000 employees on its rolls, Infosys has clearly said that a hike will have to be earned, and will not be granted de facto. It wouldn’t be surprising if other IT players follow suit, and introduce policies to encourage efficiency in performance and cut costs.