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In recent announcements, two of India’s leading IT giants, Cognizant and Infosys, have revealed significant updates regarding employee compensation. Both companies are gearing up for bonus payouts and salary hikes in the coming months, with both offering different structures of rewards based on employee performance. Here’s a closer look at what these changes mean for employees and the industry at large.
Cognizant’s Bonus Payouts and Salary Revisions
Cognizant has started informing eligible employees about their bonus payouts for 2024, according to reports from PTI. The company has indicated that these bonus payouts will range between 85% and 115%, marking the highest bonus levels in three years. These bonuses will be issued based on payroll schedules unique to each country. Employees will receive their e-letters regarding bonuses over the course of this week, with payouts set for distribution in March and April.
In addition to bonuses, Cognizant has also announced merit-based salary hikes, which will begin on August 1, 2025. This salary increase will apply to employees who meet certain performance criteria, continuing the company’s practice of revising salaries annually.
Infosys’ Performance-Based Salary Hikes
Meanwhile, Infosys has sent out letters informing employees about their salary hikes for 2024. The increments are based on performance evaluations, and the company has categorized its employees into three levels: those who “met expectations” will receive a 5-7% increase, while those with “commendable performance” will see a 7-10% raise. A select group of “outstanding performers” will enjoy salary hikes ranging from 10-20%. However, employees who fall under the “needs improvement” category will not receive any salary hikes. The company also stated that employees in Job Level 5 will see these raises retroactively from January 1, 2024, while employees at Job Level 6, such as managers below the vice president level, will begin receiving their revised salaries starting April 1, 2024.
What Undercode Says:
The announcements from Cognizant and Infosys reflect broader trends in the tech industry, where performance-based rewards and salary increases are becoming more common. In both cases, the emphasis is on rewarding high-performing employees, with distinctions made based on individual or team performance. This can be seen as part of an ongoing strategy by both companies to retain top talent, especially as the IT sector continues to face competition for skilled professionals.
For Cognizant, the announcement of such high bonus payouts, ranging from 85% to 115%, is a significant gesture. It signals an acknowledgment of employee efforts, particularly as the company grapples with challenges related to employee retention and engagement. The fact that these payouts will be the highest in three years suggests that Cognizant is not only incentivizing its current workforce but also positioning itself as an attractive employer in the highly competitive tech space.
However, the delayed salary hikes, set to commence in August 2025, may raise questions about the company’s agility in responding to short-term market demands. While the merit-based approach is a positive step toward recognizing employee contributions, employees may feel the need for more immediate adjustments, especially given the economic uncertainties surrounding inflation and the cost of living in various regions.
On the other hand, Infosys’ approach to salary hikes is equally noteworthy. The company’s performance-based system, which rewards high performers with larger increases, incentivizes employees to push for excellence. The clear distinctions between performance levels ensure that employees understand what is required to earn a higher raise, which can encourage productivity and healthy competition within teams. However, the decision not to reward employees in the “needs improvement” category might lead to disengagement for those who feel they are not being given enough opportunities to improve or showcase their value.
Both companies are placing a strong emphasis on differentiation in compensation, signaling a move towards more personalized and performance-driven reward structures. As both Cognizant and Infosys continue to refine their employee compensation strategies, it will be interesting to see how other tech companies in the industry follow suit. Are these companies setting a new standard for the future of work, or will their strategies be re-evaluated as the market evolves?
Fact Checker Results:
- The reported bonus payouts by Cognizant are in line with the company’s historical payout patterns.
- Infosys has consistently adopted a performance-based approach to salary increases, as evidenced by their recent salary hikes.
- Both companies are using staggered timelines for salary and bonus distributions, indicating careful planning to align with payroll schedules in various regions.
References:
Reported By: https://timesofindia.indiatimes.com/technology/tech-news/cognizant-starts-sending-bonus-letters-to-eligible-employees-says-it-is-/articleshow/118937829.cms
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