Pai differs with Murthy on pay cuts

T V Mohandas Pai, former Infosys HR head and board member, on Wednesday expressed different views vis a vis co-founder N R Narayana Murthy on senior executives taking a cut in their pay to save lower-grade employees.

“Top employees are also working for the organisation and are compensated for their work. They have variable compensation which is reduced on lower enterprise performance. They will also be asked to leave if they do not perform. Most do not have any stock in enterprises which reward them for any past sacrifice on lowering their compensation, nor do they get large dividends like promoters and founders of enterprises,” Pai told DH.

He pointed out that even though Murthy and senior people took a cut during his stint, it is not fair to say that all should follow this norm. In this current scenario, most senior people too may be worried about cost cuts impacting them.

Recently, commenting on the issue of layoffs in the IT industry, Murthy pointed out that IT companies can protect the jobs of youngsters if senior executives take pay cuts. “I have a feeling that it is possible for us to protect the jobs of youngsters if the senior management people were to make some minor adjustments — adjustment of taking salary cuts,” Murthy said last week in an interaction with a media house.

Pai, who is currently serving as Chairman of Aarin Capital Partners also pointed out that there is no truth in massive layoffs in IT sector. “What we are witnessing is that those who are not performing are only removed. There is no need to feel panicky under this circumstance as non-performers will go out anyway,” he said.

He also pointed out that IT companies are laying off just about 2% to 3% of people who have not performed, in a transparent evaluation, and this is not a big number. “It is normal for companies to restructure themselves as the global business numbers are falling. There is no need for government to interfere in this issue as there is a contract between employee and employer before getting into job and IT employees are well paid. Further the industry still has 12% to 15% attrition even during these times", he said.

When asked about the HR policies adopted by companies, Pai said there is no anomaly and they are following time-tested policies. “We can’t say that IT companies are following arbitrary HR policies. Also, there is no need for trade union in IT sector where there is high attrition, good compensation and plenty of jobs for performers” he opined.