Just two weeks before Mahesh Subramanian was hoping to receive a 15 percent salary hike and a Rs 35,000 performance bonus. On April 7, a mail hit his inbox informing him of the ‘tough economic condition’. The offshore centre (or global in-house centre) he was working for in Hyderabad informed him that the appraisal process would be delayed till mid-September.
The novel coronavirus (or COVID-19) pandemic has led to a lockdown across the country. Amid this, the glimmer of hope for annual appraisals have also dimmed with companies deferring any hike till further notice. While hikes were anyways expected to be muted, with threats of a slowdown since January, a few sectors like e-commerce, retail, digital marketing and ITeS were expected to be outliers.
Global in-house centres (GICs) were expected to offer the highest level of hikes to Indian employees. GICs are offshore centre that perform servicing functions for large multinationals. India has more than 1,000 GICs that have set up to leverage the country’s highly-skilled and low-cost talent pool.
Also Read: IIT, IIM students lose job offers; what happen's next?
Industry sources said while companies do not want to create panic among employees, appraisals this year would be ‘highly unlikely’.
In March, India's largest construction and engineering company Larsen & Toubro (L&T) said it is deferring the extra salary revision - which was planned from March 1 till the end of July. The management said the decision had the backing of its employees.
A lockdown has impacted the revenue of companies across India. Uncertainty around when the lockdown will be lifted and an extension of weak demand has led to companies saving costs and postponing hikes.
Given that the bigger concern (due to COVID-19) is how many jobs will go and how many will stay, the focus is on conservation, Rituparna Chakraborty, co-founder and Executive Vice-President, TeamLease Services, told Moneycontrol. “It is inevitable that appraisals will be impacted. It is not because of lack of good performance, but because of the current scenario,” she added.
If this was only India-centric, those working in multinational corporations would have been spared. However, considering that COVID-19 has impacted operations across the globe, appraisals across companies are being hit.
Human resource professionals told Moneycontrol that even in companies where the appraisal letters have been handed out, they are slowly being withdrawn.
“It is understood that capital conservation is the biggest priority. This is also understood among employees because we would be forced to hand out pink slips,” said the head of human resource at a mid-sized bank.
For now, employees across companies have been told that the process is deferred. If the COVID-19 curve is flattened by June, it is likely that the previously announced appraisals would be honoured from September onwards.
Chakraborty said appraisals are much lower in the order of prioritisation for companies and added that it is a very distant scenario.
Appraisals follow the April to March cycle in most companies. Based on the performance of the individual and the company in the previous year, a rate of salary hike is fixed by the human resource team in discussion with the reporting managers.
Follow our full coverage of the coronavirus pandemic here.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
