Pressed under funding crunch, startups are giving peanuts in appraisals this year

If you are working in a startup, don’t keep high expectations from appraisals this year. Startups that were on a hiring spree and giving out at least 30 per cent increment last year are now either giving minimal hike or even no hike.

Squeezed between low funding and pressure to dole out profits, new-age firms are trimming appraisals and going low on hiring in a bid to monetize their businesses.

TOI reported that Zomato told its employees that it may freeze appraisals for 2016. Likewise, InMobi has also delayed the cycle.

"A few months ago, Zomato asked its employees to take a pay cut in lieu of Esops. Post that, they informed employees about no increments for this year. All this is to cut wage costs at a time when their losses are shooting up," a person privy to the developments at the company told TOI.

Meanwhile, Zomato said in an emailed response told TOI, "We were prudent in how we did increments last quarter. We spoke to our teams and were very transparent with them about this decision. Our people are here for the long term, and understand the reasoning behind it. To add to this, we have not seen any attrition on account of this."

Flipkart and Snapdeal are also not upbeat about the appraisals this time.

(Image: Thinkstock)
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