Cognizant salary increment 2024

Cognizant’s Pay Hikes: 1% Raise Amidst Criticism Over Freshers’ Salary

Cognizant’s recent salary hikes have stirred controversy, particularly in the context of its low starting salary offer for fresh graduates. The modest raises come after a four-month delay and amid significant scrutiny regarding the company’s compensation practices.

Key Details:

Salary Hikes:
- Cognizant has reportedly implemented salary hikes ranging from 1% to 5% for some employees, based on their performance ratings.
- Employees with a performance rating of three received an increment of 1-3%, those with a rating of four saw a 4% increase, and top performers with a rating of five were awarded up to 5%.
- These increases are notably lower than the 7-11% hikes reportedly given in April 2023.
Starting Salary Controversy:
- The timing of these modest raises coincides with criticism of Cognizant’s off-campus hiring program, where fresh graduates are offered a starting salary of ₹2.5 lakh per annum. This figure, unchanged since 2002, has become a point of contention on social media, especially given the current economic climate.
Headcount and Profit:
- Cognizant reported a reduction in its total headcount by 8,100 employees for the quarter ending June 2024, despite this, the company achieved a 22.2% year-on-year increase in net profit, totaling $566 million, with a 3.6% sequential growth.
CEO Compensation:
- CEO Ravi Kumar Singisetti is now reportedly the highest-paid IT CEO in India, earning $22.56 million (approximately ₹186 crore) in 2023. His compensation package, which includes a one-time stock award of $20.25 million, is 556 times the median salary of Cognizant employees.

Advantages:

Performance-Based Raises:
- The salary increments are tied to performance ratings, which could encourage higher productivity and reward top performers.
Profit Growth:
- Despite the challenges, Cognizant reported a strong 22.2% increase in net profit, indicating financial health and stability.
CEO Compensation:
- High compensation for the CEO might attract and retain top executive talent, potentially benefiting the company’s strategic direction.
Transparent Reporting:
- The company’s financial results and executive compensation details are openly reported, which aligns with transparency and accountability standards.

Disadvantages:

Modest Raises:
- The 1% to 5% raises are significantly lower compared to industry standards and previous years, which may affect employee morale and retention.
Low Starting Salary:
- The starting salary of ₹2.5 lakh per annum for fresh graduates has been criticized as insufficient, given the current economic conditions and inflation. This outdated pay scale could impact the company’s ability to attract top talent.
Headcount Reduction:
- The reduction of 8,100 employees may indicate underlying challenges or cost-cutting measures, which could affect company operations and employee sentiment.
High CEO Pay Discrepancy:
- The vast disparity between the CEO’s compensation and the median employee salary could lead to dissatisfaction among employees and potentially affect the company’s public image.
Delayed Raises:
- The four-month delay in implementing salary hikes may be perceived as a lack of responsiveness to employee needs and economic conditions.

Conclusion:

Cognizant’s recent salary adjustments and compensation practices reflect a complex interplay of performance-based rewards, financial stability, and ongoing scrutiny over its pay structures. While the company demonstrates strong profit growth and transparency, the modest raises and low starting salaries present challenges that could impact employee morale and talent acquisition.

FAQs

Q1: What were the salary hikes implemented by Cognizant recently? A1: Cognizant rolled out salary hikes ranging from 1% to 5% for employees, based on their performance ratings.

Q2: What is the controversy surrounding Cognizant’s starting salary for fresh graduates? A2: Cognizant offers a starting salary of ₹2.5 lakh per annum for fresh graduates, a figure unchanged since 2002. This has been criticized on social media and questioned in the context of current economic conditions.

Q3: How did Cognizant perform financially in the recent quarter? A3: Cognizant reported a 22.2% year-on-year increase in net profit, totaling $566 million, and a 3.6% sequential growth for the quarter ending June 2024.

Q4: What is notable about Cognizant’s CEO compensation? A4: CEO Ravi Kumar Singisetti earned $22.56 million (approximately ₹186 crore) in 2023, making him the highest-paid IT CEO in India. His compensation package includes a significant one-time stock award.