In an endeavour to check attrition, Flipkart has decided to alter its pay hike policy. Instead of yearly increments, it will now grant increments in two batches. Simply put, Flipkart has introduced a ‘merit-linked’ increment policy.
That means, employees will not get their increment amount in one go, but in two parts. Part of the payment will be made in April, while the rest will be given later the same year, most likely October. This move is expected to retain talent across departments and levels. Those who are promoted will continue to be paid their increments, regardless of the tweaked policy.
This compensation review will not affect the allocation of stock options, which will continue as per the norm for the eligible employees, as per media reports. The company also plans to give 100 per cent bonus to its entire worforce in 2024.
Last year, considering the macroeconomic environment, Flipkart had held back increments for one-third of its workforce. Early this year, in January, Flipkart, owned by Walmart, had announced a workforce reduction that it said could lead to a five to seven per cent decrease in its total team. This was announced as part of the company’s annual performance-based job cuts, a practice that has been in place for the past two years. The process was, at the time, anticipated to conclude by March or April, aligning with ongoing performance evaluations and the conclusion of the current fiscal year.
It was reported earlier that the e-commerce company, which had about 22,000 employees (excluding Myntra) in January 2024, had been actively controlling expenses by halting new hires in the last year.
