Want a payhike? Clear an exam first, LTI Mindtree tells staff

For project leads, managers and lead architects, half the weight in appraisals depends on project completion, and the rest on a competency exam with multiple-choice questions on coding and mathematics. According to four LTIMindtree employees, this is under a new framework called My Career My Growth, introduced last year for senior executives, and expanded to include more employees this year.

Mixed reactions

“This competency exam is a skill-based exam that gets tougher as you get more experienced,” one of the four employees said on the condition of anonymity.

A second employee suggested this was introduced to limit payhikes, but the company had a different view.

Also read | Salary hikes are expected to be smaller this year, but not for top talent

“Our performance management process integrates competency-linked goals alongside project-specific goals. We believe both are equally important in assessing the overall annual performance of our talent, and as a result, they carry equal weightage,” an LTIMindtree spokesperson said in response to a query.

“We regularly evaluate the competencies of our talent through objective assessments, minimizing subjectivity and ensuring they are client-ready. This approach also enables employees to define their career aspirations, identify skill gaps, and follow targeted learning pathways for continuous development in alignment with evolving business needs,” the spokesperson said.

LTIMindtree, which ended last year with $4.29 billion in revenue, grades its employees based on their experience. While P0 and P1 refer to engineering graduates and trainees, P3, P4 and P5 refer to managers, team leads, and lead architects with more than four years of company experience.

“The company introduced it last year for those in P5 rank, but now they have introduced it for P4 and P3 too,” the second employee cited above added.

“I haven’t heard of such a thing (competency-based exam) in any other IT services company,” said Abhishek Kumar, an analyst at JM Financial.

A second analyst said such tests were done to gauge the tech skills of senior employees.

Also read | Wipro to hand out an average 8% salary hike to its top performers this year

“These assessments are basically done to ensure that middle and senior-level executives keep up with new technologies,” said a Mumbai-based analyst on the condition of anonymity.

LTIMindtree’s challenges 

LTIMindtree gave hikes of around 4% on average in October last year. It usually starts the appraisal process at the end of January or the beginning of February and gives hikes around August.

However, salary hikes last year at the country’s sixth-largest company were delayed like at its larger peers, save Tata Consultancy Services Ltd, which rolled out increments of 4.5-7% in the April-June 2024 period. Last year, the country’s largest IT services companies delayed salary increments to combat low demand and shore up operating margins.

Bengaluru-based Wipro Ltd handed out salary increments of 4-8% from September last year, whereas HCL Technologies Ltd started giving hikes in the October-December 2025 period.

Tech Mahindra Ltd rolled out fatter paychecks to employees from January, offering hikes of around 7% on average, whereas Infosys started offering hikes of 5-8% on Tuesday. Of the top five, Infosys and HCLTech have announced the roll-out of salary hikes in tranches.

Also read | When will LTIMindtree start delivering on its merger promise?

Wage hikes impact the operating margins of IT outsourcing companies as people costs make up the bulk of their overall expenses.

LTIMindtree ended the three months through December 2024 with $1.14 billion in revenue and 13.8% in operating margins, down 170 basis points sequentially. The management attributed this to its annual increments.

“While we expect to improve margins in Q4, absorbing the full impact of wage hikes may take a bit longer in the current growth environment,” said Debashis Chatterjee, chief executive of LTIMindtree, in an interaction with analysts on 16 January.

LTIMindtree’s new directive of a competency exam for the top rung comes as its leadership passes hands.

The company announced Venugopal Lambu as its CEO-designate last month. While LTIMindtree has not specified Lambu’s official takeover date, he was chosen for five years, with his tenure ending in January 2030. Lambu is expected to replace Debashis Chatterjee, who took over as CEO in November 2022.

As of December 2024, the company has 86,800 employees.

L&T Group, the construction-to-financial services conglomerate, made a hostile bid for Mindtree in 2019. The conglomerate merged its IT services arm, L&T Infotech, with Mindtree, effective November 2022, to form LTIMindtree.

Also read | LTIMindtree readies recipe for $10 bn revenue, but near-term woes a spoilsport

Lambu will be tasked with plugging executive departures in the company. At least nine top executives ranked senior vice president and above have left the company since the merger was announced in May 2022. Dependence on a competency exam for manager pay hikes might not augur well for the company, which is already grappling with attrition at the top.