The country's second largest software services firm Infosys has raised salaries of its employees in the country by 6-7% and by 1-2% for onsite workers, effective April 1.
"We have increased salaries. We have given salary hikes of 6-7% for offshore and 1-2% onsite employees, effective April 1," Infosys CFO Rajiv Bansal said.
The increase in salaries and promotions that have been rolled out and the investment in new visas is likely to impact the first quarter margins by about 3%, he added.
Infosys added 10,997 employees (gross) in the last quarter of FY'14 and 39,985 during the fiscal to take its total headcount to 1,60,405 people.
"This is the second time we are giving compensation increase over the last nine months. Nine months back, we had given a compensation increase of 6-8% offshore," Infosys CEO and MD SD Shibulal said.
The company has been showering its employees with incentives including promotions and salary hikes in a bid to boost morale and check rising attrition.
The Bangalore-based company, which has trailed peers TCS and Cognizant on growth, is also looking at weeding out non-performers to improve efficiency.
People following developments at the firm said focus is on retaining quality talent, while letting go non-performers, something founder and executive chairman NR Narayana Murthy has reiterated on various fora.
About 12,500 employees have been promoted since October.
Infosys, as part of performance improvement programme, allows 'poor performers' to undergo training to get into shape. These employees then undergo a review and those who fail are asked to leave.
Murthy was brought back at the helm in June last year to try and pull Infosys back on the growth track following several quarters of dismal performance.
Within weeks of his return, Infosys increased salaries of its employees in India during 2013-14 by an average 8%.
In 2012, Infosys had delayed hikes and salary increases were given only in October when the company came under pressure due to increments offered by peers.
In January, Murthy had said the company is looking at returning to its practice of announcing salary increments effective April.
According to global HR firm Aon Hewitt, employees in the IT sector can expect an average salary increase of 10.2% during 2014.
Increments in the software products industry are estimated at 10.8% and knowledge process outsourcing at 11.9%.