In a move that reflects its strong performance in the first quarter of the fiscal year 2024, Infosys, India’s second-largest IT firm, has announced plans to introduce a significant variable pay component for its employees.
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The company intends to roll out an average of 80 per cent variable pay for the quarter ending June, disbursing it alongside this month’s salary. The decision comes as a testament to the organization’s commitment to rewarding its employees for their contributions and fostering an environment conducive to future growth.
The internal communication sent to employees highlighted the company’s positive Q1 performance, which has laid a robust foundation for future expansion. Infosys expressed its dedication to facilitating businesses in their digital transformation journeys and addressing emerging client needs. The company’s success has been attributed to its unwavering focus on key priorities, seamless collaboration across teams, and adaptability to changing market dynamics. This collective effort is expected to pave the way for a productive and promising quarter ahead.
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While the average payout across the organization is pegged at 80 per cent for the first quarter of FY24, individual percentages will vary based on individual performance and contributions during the quarter. This move is aligned with Infosys’ commitment to recognizing and rewarding exceptional employee efforts, thereby fostering a culture of high performance.
Notably, this decision follows the precedent set by Tata Consultancy Services (TCS), which announced annual hikes effective from April. TCS also assured variable pay for its staff, with exceptional performers receiving 100 per cent of the variable component. However, Infosys’ move is distinctive due to its higher variable payout percentage and its reflection of the company’s outstanding Q1 results.
The announcement also comes amidst Infosys’ decision to forgo annual hikes for FY23, with previous increments having been disbursed in July 2022. The company’s Chief Financial Officer, Nilanjan Roy, stated that the matter of annual increments was under consideration.
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In the preceding quarter, Infosys reported a nearly 11 per cent rise in net profit for the quarter ending in June. However, it fell short of analyst expectations and revised its revenue growth forecast for the fiscal year, attributing the adjustment to client spending reductions and decision-making delays. The company’s updated projection indicates a more conservative growth outlook for FY24, citing global macro challenges and subdued demand for outsourcing services.
