TCS Ties Monthly Variable Pay To Attendance, Staff Fear Lower Take-Home: Report

Employees at IT giant Tata Consultancy Services (TCS) were in for an unpleasant surprise as they received their annual salary increments this week. Thousands of its nearly six lakh employees have been left discontent after the company restructured their pay components and linked their variable pay policy to office attendance, reported Mint.

The variable pay for those working from the office has now been shifted to a monthly "performance pay" component to be tied to attendance and deployment metrics, said employees.

Returning to a regular appraisal cycle after last year's delayed revisions, TCS gave average salary hikes of 5-8% this year, the report said. It gave the top-rated performers in the 'A+' band double-digit hikes of 10-13%, while those in lower bands received between 2% and 3%.

TCS also restructured the salary frameworks for its India-based staff as part of compliance with the new Labour Codes.

After reviewing their documents, several employees said that their monthly variable pay had either seen a significant cut or shifted to a quarterly or annual payout format, and that this directly impacted the salary they received each month.

For some, gratuity was no longer a part of their CTC calculations, the report added, in what they fear could hurt salary negotiations while switching jobs.

TCS's new pay structure has two parts in the variable component: the monthly performance pay and the performance bonus. The performance bonus, which was earlier paid quarterly, might now be paid on an annual basis and no longer be linked with office attendance. Any deduction in either of the two components would reduce the take-home salary.

Moreover, managers at TCS have reportedly been asked to put more employees in the lowest performance bands (Band D). Employees in the lowest performance category face salary cuts or potential exit.

Speaking to Mint, a TCS spokesperson said that the increments were in line with the commitment made during the Q4 earnings call.

"The revised salary structure that the employees have received are guided by three key principles that include compliance with the new labour codes, standardisation of wage structures across our India workforce, and protection of employees' take-home salary, while allowing flexibility for tax efficiency," the spokesperson said.

The company said attendance remains linked to variable pay "with some rationalisation which is beneficial for the employees."