Flipkart converts hikes into payouts, rolls out 100% bonus to stem attrition

livemint.com:

MUMBAI : E-commerce platform Flipkart has rejigged its increment policy, splitting annual salary increases into two tranches rather than have those reflecting in an employee’s pay structure. In an effort to plug attrition, especially at the senior levels, the company will also roll out 100% bonuses to all its employees. According to a senior Flipkart executive, the Bengaluru-based e-commerce firm has detailed out the new compensation structure to its employees in a letter, which Mint has reviewed.

Walmart-backed Flipkart has had a spate of layoffs recently and expects these measures to help it retain employees across levels. Per the new policy, if an employee is awarded a 5% annual increment, the overall salary will not reflect the increased amount. Instead, the hike equivalent will be split into two tranches, with the first amount paid out in April and the next in the second half of the year.

These will be “merit-linked payouts", Flipkart has said in its letter. Employees being promoted will get “increments as usual across grades", it said. However, all Flipkart’s employees will receive bonuses this year, unlike last year.

A spokesperson for Flipkart confirmed the development. “We are providing compensation increases to employees getting promoted, merit-linked payments and bonus payouts. Additionally, our stock option allocation exercise will continue as is for those who are eligible," the company spokesperson said.

In January, Flipkart laid off about 5% of its total workforce, or nearly 1,000 employees, as a part of its annual performance review cycle, according to several media reports. While the company carries out these routine job cuts every year, such measures were also aimed at reducing costs. The company has