Bengaluru: Tata Consultancy Services Ltd’s decision to award hikes of up to 6% to top performers should have sparked jubilation. Instead, revised compensation letters show changes that link work-from-office to monthly pay, and a salary structure that has left many employees confused about the impact on take-home pay.
According to some compensation letters reviewed by Mint and employees familiar with the changes, TCS has shifted work-from-office-linked variable pay from the performance bonus component to a monthly “performance pay” category tied to attendance and deployment metrics.
TCS’s move comes at a time when there has been rising talk of working from home, especially after PM Narendra to the country.
The company’s compensation letter to an employee accessed by Mint read: “You will be eligible for a performance pay of up to ₹64,800 per annum based on your individual performance and other organisational imperatives like Work From Office Index (WFO), Deployment Index (DI), etc, as communicated from time to time. Performance pay will be paid proportionately after adjusting for organizational imperatives mentioned above.”
Meanwhile, performance bonus, which was paid quarterly earlier, might now be paid on an annual basis, and is no longer linked with office attendance.
“The percentage of the potential amount to be paid for the quarter/year is decided and announced after the close of the quarter/year based on the Company, Unit performance and other factors during the applicable period,” read a compensation letter of a second employee.
“Eligibility for this component of the Variable compensation is based on multiple factors such as the grade and performance of the individual, one’s capability development in line with organizational requirements, fluidity demonstrated by the individual per laid guidelines, performance of the company and respective unit, and adherence to organizational policies, guidelines and imperatives as communicated from time to time,” read the letter.
Salary structure
Last month, management had said during its post-earnings analyst call that the company would roll-out wage hikes for all eligible employees from 1 April, with top performers likely to get double-digit hikes.
However, top performers have received hikes of up to 6%—compared to 4.5-7% on average last year. Those rated poorly have faced salary deductions. The company rates employees in bands with top performers marked with an A+band whereas lowest-ranked performers are given the D band.
The company has issued hikes for employees up to C3A level—typically those with 7-10 years of experience—and is yet to roll-out wage hike letters to senior employees.
“I have been a top performer for two years. I was given the A-band this time around, but still I only got a 6% hike in salary,” said one executive.
Several employees said the revised salary structure has muted enthusiasm around the annual hikes. Gratuity payment is set aside from the total salary package, bringing down the overall salary increase. Employees are also unhappy with a marginal increase in basic pay.
“The bouquet of benefits, which included house rent allowance, meal coupons, fuel and travel allowances, has now been scrapped, whereas house rent allowance has been given a separate column in the salary slip. We don’t know how these have been done,” said a second executive with knowledge of the matter.
According to the new salary structure, the company has now introduced ‘HRA and Conveyance Allowances’ as a new category.
“We don’t know how they have redistributed each of these sections. At the end of the day, our hikes are not material despite the marginal increase in basic pay,” said the second executive.
TCS’s peers including Infosys Ltd have not yet decided on the timing and quantum of . On the other hand, Wipro said it had rolled out salary increases from 1 March.
These hikes come at a time when automation tools eat into the work done by IT services companies. TCS ended last year with $30.02 billion in revenue, down 0.5% on a yearly basis, marking its first revenue decline.
Queries emailed to TCS on Monday were not immediately answered.