A big controversy has erupted at Tata Consultancy Services after it announced a 5% salary hike. Many employees are claiming their take-home pay has actually gone down by up to ₹3,000 after getting their appraisal letters.
There's a lot of chatter and unhappiness among employees at Tata Consultancy Services (TCS), India's biggest IT company. The company recently announced an average salary hike of 5%, but instead of celebrating, many employees are claiming their take-home pay has actually gone down. Some say their monthly salary has dropped by as much as ₹3,000. Even though the company announced an average 5% salary hike, many employees claim their in-hand (take-home) salary has decreased instead of increasing.
Appraisal or a pay cut? Employees are confused
According to TCS employees, the situation turned out to be the opposite of what they expected after the new salary revision was implemented from May 18. Employees thought the 5% average hike would improve their monthly income, but many found that their revised salary structure offered very little real benefit. Some employees have even alleged that their annual package shows a drop of ₹1,000 to ₹10,000. This situation has particularly affected employees who were placed in the B and C performance categories. They say that even after the appraisal, their financial situation has either remained the same or worsened.
Is the CTC the real game? Gratuity removal adds to the confusion
According to reports, the biggest reason for this whole controversy is the company's changed CTC structure. It is being said that TCS has now separated the gratuity component from the employees' "Cost to Company" (CTC). However, the company states that the gratuity benefit has not been discontinued but has been placed within an internal structure. This very change has become a source of confusion for the employees. Earlier, gratuity was included in the total CTC, but now it is not visible in the new structure. This has made many employees feel that their total salary has been reduced.
Related Articles
Dispute over variable pay, bonus linked to 'Work From Office'?
Employees have alleged cuts not only in their basic salary but also in their "variable pay". Some employees claim that the variable pay, which was previously given every month, is now being changed to a quarterly or annual payment. This has a direct impact on the monthly take-home salary. Not only that, some employees have also alleged that bonuses and performance pay are now being linked to compliance with "work-from-office" rules. This means that if office attendance is low, employees' incentives could be affected.
Good news for A+ employees, but others are unhappy
While employees with lower performance ratings seem dissatisfied, high-performing employees have benefited well from this appraisal cycle. Many employees with an A+ rating have reported receiving double-digit hikes. Employees in the A category also received a relatively better increase. But employees in the B and C categories say that the increase in their salary is very low compared to inflation and tax deductions.
Controversy comes amid pressure on the IT sector
This whole controversy has emerged at a time when the Indian IT industry is facing challenges like global economic pressure, reduced client spending, and project delays. Companies like Infosys, HCLTech, and Tech Mahindra are also taking a cautious approach to salary hikes. TCS has clarified that the new salary structure has been prepared in line with the "new labour code" and aims to secure employees' take-home salary and simplify tax savings. The company also reiterated that it will continue its tradition of giving annual salary hikes. But for now, a big question is echoing among the IT giant's over 5.84 lakh employees: "If we got an appraisal, why did our salary go down?"
