Coronavirus may hit appraisals. Employees might face delay and a decrease in salary hike and bonus during this appraisal season amidst the coronavirus outbreak.
Employees may face delay or a decrease in salary increment and bonuses during this appraisal season, as coronavirus pandemic has affected many areas of business and hit markets on a global scale.
According to the Economic Times Report, employers are adopting a wait-and-watch approach to variable compensation amid continuing uncertainty. Sectors such as aviation, hospitality, travel, and leisure are likely to be among the worst hit.
However, sectors such as pharmaceuticals and professional services are expected to remain unaffected by the Covid-19 outbreak.
C P Gurnani, CEO of Tech Mahindra said “Bonus, variable pay or any increment is right now on hold. At this stage, most of the world is addressing their first priority: keeping people safe”
“Employers may opt for muted salary increases anticipating tough quarters ahead,” said Arvind Usretay, director, rewards, Willis Towers Watson, a risk management advisory. “Some may delay increments by at least a quarter and continue to monitor the situation, but the current scenario is surely going to impact overall sentiment and may lead to conservative bonus payouts and not necessarily a complete washout.” ET Reports.
Most of the IT, Technology, and Non-IT firms have asked their employees to work from home and have sent trainees back home from campuses in a bid to keep to social distancing norms and reduce the spread of the virus.
Accenture cuts revenue growth guidance by 3%. Amidst the uncertainty around coronavirus, the company lowered its revenue growth expectations for FY20 despite growth in revenue in the second quarter over the same period last year.
According to a senior TCS executive, Tata Consultancy Services has already completed its annual appraisals for the year but has not yet decided on the payouts.
IT Giants such as Wipro, HCL Technologies and Infosys hand out hikes later in the year.
Compensation experts say, companies may potentially consider postponing pay increase schedules and taking a decision once things have settled down with retrospective effect.
There will be a hit of 0.3-0.5% on the GDP in the next fiscal year,” said one of the officials to media aware of the estimate.
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