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IT services firm Tata Consultancy Services (TCS) has revised its anniversary appraisal policy for newly joined lateral employees, Moneycontrol has learned.

“Thank you for your contribution towards a year of growth. Your continued commitment and effort will help TCS sustain its leadership position. Your Annual Compensation will be reviewed during the next Annual Appraisal process…” CHRO Milind Lakkad said in an internal mail to eligible employees.

When an employee was seeking clarification on this, HR said all ‘EP Hires’ or experienced professionals with an anniversary date of 1st April 2022 or after, will not receive a letter and/or increment on completion of the first year.

“The first increment will be at the subsequent annual increment cycle,” says the mail from HR.

Nascent Information Technology Employees Senate (NITES), a Pune-based labour union came down heavily on the IT major. “At the time of recruitment the company promises to pay a definite salary to employees but later amend policies without even talking to employees which are no less than cheating,” Harpreet Singh Saluja, president of NITES told Moneycontrol.

“When employees were anticipating getting the anniversary appraisal, they were suddenly told otherwise. Why were they kept in the dark during the onboarding?,” Saluja added.

Unlike annual appraisal which happens on a specific timelines, anniversary appraisal is when an employee completes a full year of service into TCS from the date of his/her joining. Once the review process is done, employees usually get an email with a congratulatory message and the revised compensation (CTC). According to Saluja, many companies follow the same process but with different names.

“We have always had increments in line with industry benchmarks. Even during the pandemic, we ensured our increment cycles were unaffected. It is incorrect to suggest otherwise,” TCS said in a statement.

“All experienced hires will be given an increase as part of the annual salary appraisal that follows their one-year anniversary,” it added.

TCS did not comment on the reason for scrapping the anniversary appraisal policy.

“Though not mentioned in the offer letter, we were regularly told by our reporting managers about the anniversary appraisal policy. We even filled our inputs in the internal employee portal,” said a TCS employee on condition of anonymity.

The employee, who joined after the annual appraisal cycle in July, said he completed one year in TCS but did not get any anniversary appraisal as promised earlier.

HR expert Gautam Ghosh says the step looks to be about reducing overall salary costs to ease margin pressure, since attrition hasn't come down. “Because laterals would get more money.”

Over 6 lakh employee-strong company saw its attrition for the Q1FY23 come in at 19.7 percent on a last twelve-month basis, which is the highest in the last six quarters.