In further evidence that India has been less impacted by the global turndown than other major economies, a survey by human resources consultancy and outsourcing firm Hewitt Associates says just 16 per cent of Indian firms froze salaries and only 6 per cent cut salaries for 2009-10.
According to a mid-year survey on 'performance and reward trends', companies across industries are strongly differentiating rewards on the basis of performance, but a majority of them are not considering any layoffs or severe salary cuts in the current fiscal.
"With only five per cent of the organisations considering layoffs, minimal salary reduction at 6 per cent and salary freeze at 16 per cent, India Inc looks cautiously optimistic," Hewitt's performance and rewards consulting practice leader in India Sandeep Chaudhary said.
The survey revealed that the 16 per cent of companies that imposed a salary freeze were mainly organisations in the financial services, IT and ITeS sector. Moreover, only 5 per cent were considering layoffs for 2009-10.
"During these unprecedented times when firms across the world considered options such as mass layoffs and salary cuts, India Inc also considered the same measures but with maturity," Chaudhary said. "It reflects the response of a growth economy managing a short- to medium-term slowdown, while keeping an eye on long-term growth."
Interestingly, about 30 per cent of the organisations have deferred their salary revision cycle from April to July or October, the survey stated.