India’s largest IT services company, Tata Consultancy Services has rolled out salary hikes averaging around 5 per cent in its latest appraisal cycle. However, the revision process has sparked concerns among some employees over changes in compensation structures and take-home pay.
The appraisal exercise comes months after the company announced annual increments ranging between 4.5 per cent and 7 per cent on average, with higher revisions for top performers. Employees across performance categories have now begun receiving revised compensation details, leading to mixed reactions within the workforce.
According to reports, employees placed in the top-rated A+ category received hikes between 9 per cent and 13 per cent, while those in the A category largely saw increases ranging from 5 per cent to 9 per cent. Employees in the B category reported lower revisions, while workers in the C category indicated either marginal increases or little change in compensation.
The appraisal process has also generated discussion around a wider differentiation between performance bands, particularly following the reported introduction of a separate A+ category this year. Employees indicated that the gap between top-rated and lower-rated categories appeared more pronounced during the latest cycle.
However, the larger concern among some employees appears linked not to the appraisal percentages but to restructuring in salary composition. Several employees reportedly claimed that despite receiving increment letters, changes to compensation components resulted in lower displayed compensation or reduced take-home pay.
The company stated that compensation restructuring for India-based employees was undertaken to align with new labour code requirements. According to the company, the revised framework was guided by compliance considerations, standardisation of wage structures and maintaining employee take-home salaries while providing flexibility for tax efficiency.
Employees also reportedly raised concerns around changes in variable pay structures, insurance costs and salary component allocation. Some indicated that certain payouts had shifted toward quarterly or annual formats, while others pointed to changes in allowances and compensation calculations.
The developments highlight how compensation restructuring, even during increment cycles, can shape employee sentiment beyond headline salary hike numbers, particularly as organisations adapt payroll structures to evolving regulatory and business requirements.
