Tata Consultancy Services (TCS) announced a salary hike for its employees despite it having a negative impact on its operating margin. According to reports, the salary hike that has been effective since April 1 this year will take a hit on the operating margin but the company is confident that “improved efficiencies” will offset this hit. Apart from the pay hike, TCS has also started promotion cycles and “exceptional performers” can expect a raise anywhere between 12% and 15%.
TCS recently found itself in the midst of controversy after senior HR operatives were found running a bribe-for-jobs scam. Four senior officials were sacked for accepting bribes from recruitment agencies in exchange for providing jobs to their candidates. A whistleblower had complained that this scam has been going on for several years now. However, the company stated that there was no recruitment scam but it was only a breach of code of conduct enforced at the company.
A report from the Mint said that the recruitment activities in TCS were handled by the Resource Management Group (RMG) and the complaint was against ES Chakravarthy, the head of the department. However, TCS said, “This [the scam] does not involve any fraud by or against the company and has no financial impact. The issue relates to breach of Company’s Code of Conduct by certain employees and vendors providing contractors, and no key managerial person of the Company has been found to be involved."
TCS also denied RMG’s role in recruitment. “RMG is responsible for allocation of available resources to various projects and in case of any shortfall, fill such requirements through contractors. The complaint referred to in the article relates to the hiring of such contract resources employed by the contractors," the company said.