Just after a month of the ‘bloodbath’ at the stock market, tech giant Accenture has introduced a new salary policy. Under the new policy, employees will receive an approved pay rise in halves which means, a portion of the hike will be added to their basic salary, while the other half will be paid as a one-time cash payout in June. The new system will be rolled out during Accenture’s primary June compensation cycle and is applicable to its global workforce, including the 3.5 lakh workers from India. The revision comes at a time when the company is battling a macroeconomic environment and trying to balance employee rewards with cost discipline.
How will the model work?
Under the revised framework, talent and group leads will first determine an eligible employee’s overall salary increase.
50% of the salary will be added to an employee base salary while the remaining will be paid as a lump sum amount. According to a memo by the company, the new model is designed to give employees more cash immediately while allowing it to extend base salary increases to a larger number of employees. It mentioned that minimal salary hike was rewarded to employees who remained at the same level last year. This year, however, it has increased the number of employees eligible for base pay hikes by dividing the approved increment between permanent salary and a one-time payout.
Official revealed the hike linked to promotions will continue to be added fully to employees’ base pay. The one-time cash payment will also remain separate from the company’s annual bonus cycle, which takes place in December. It added that compensation decisions will continue to depend on employees’ skills, performance, impact and behaviour.
Meanwhile, employees have given a mixed response on the latest announcement. Some have doubts about the validity of the new policy, while others have sought clarity on how the one-time payout will be taxed.
Why the change?
The company has decided to focus on balancing employee compensation with financial flexibility as businesses navigate continued economic uncertainty. By splitting the increase between fixed pay and one-time payment, authorities expect to reward employees without substantially increasing the pay roll cuts.
Who does the new rule not apply?
As per an internal memo,
- Employees receiving promotions will continue to receive their entire salary increase as base pay.
- The one-time lump-sum payment will not replace Accenture’s regular performance bonuses paid during the December compensation cycle.