After growing faster than Indian information technology (IT) industry, Cognizant Technology Solutions Corp has now rewarded its employees by giving out as much as 200% of the variable components of their 2011 salaries.
Typically, anywhere from 20 to 30% of an employee salary is labeled as variable pay, linked to a combination of overall company performance and individual performance.
"The company has done the repeat of 2010 in rewarding its top performers. The top performers got around 200% of their target bonus while the average bonus given was 150%. The bonuses were on expected lines as the company has been scoring good quarter on quarter," said a Cognizant employee in Chennai on condition of anonymity.
"Yes, Cognizant has announced performance-linked bonus payout for all its associates, globally," said Shankar Srinivasan, Chief People Officer, Cognizant. "Our industry leading revenue growth in calendar 2011 has enabled us to pay performance bonuses well above target."
Cognizant's bonus comes at a time when industry lobby Nasscom has projected tepid revenue growth for software exporters. Last month, Nasscom forecasted 11-14% growth for India IT-BPO Industry during fiscal 2013, lesser than the 16.7% growth that the sector saw this in the just concluding fiscal.
"Even against the backdrop of a volatile economy, we grew our revenue by 33.3 percent over 2010 and added more than 33,500 professionals to our workforce globally," pointed out Srinivasan who added that Cognizant's employee attrition rate of 10.1% was among the lowest in the industry.
With the bonus pay out, there is increasing expectation of a good pay hike later this year.
"We are now eagerly waiting for the wage hike that would happen in May/June this year," said an employee from the company's Chennai campus. "We are positive that it would be the same like the bonuses. If you recall Cognizant was the only company which has promoted 33% of its workforce during the calendar year 2011."
While in 2010, Cognizant grew its revenues by 40 percent, in 2011, it grew its revenues by 33.3 percent. Both years, Cognizant grew its revenues by 10-15 percent higher than what NASSCOM projected for the industry.
Despite an uncertain economic environment in key global markets, Cognizant has forecasted growth of at least 23 percent this year. Cognizant had guided for 20 % growth at the beginning of 2010 but managed to grow by 40 percent that year. In 2011, it guided for 26 percent revenue growth and posted 33.3 % growth.
Going by Cognizant's guidance only $100 million would separate it from Infosys in terms of revenues. Cognizant's revenue forecast of $1.7 billion is now close to Infosys' March quarter guidance of $1.80-1.81 billion.
Cognizant has over 137,700 employees globally, of which over 1, 00,000 are in India.
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