Remember a college rule that bars students from appearing in exams if they fail to attend a certain number of classes in an academic year? India’s IT giant, Tata Consultancy Services (TCS), has introduced a similar rule, but for employees’ variable pay.
Variable Pay is a part of salary. It is mentioned in the Cost-To-Company (CTC) package offered to employees at the time of joining. In most of the companies, the payment of Variable Pay generally depends on performance of the employee. However, TCS has introduced a new criteria for deciding the variable pay amount. It will be based on how many days an employee has worked from office in a year.
Employees attending office on more than 85% of days in a year will be eligible for full variable pay of a financial year. Those working from home for more than 40% of office days will get no variable pay!
TCS has updated its variable pay policy to emphasize the importance of working from office. The revised policy has introduced four attendance slabs determining variable pay for employees.
In February, The Times of India (TOI) reported TCS linking variable payouts to complying with its return-to-work mandate. In another report today, the newspaper said that business unit heads at TCS have informed their teams that grades, necessary for promotions, will depend on office attendance records.
Also Read: TATA Communications is building an AI supercomputer!
Changes in Variable Pay
Under the new policy, those working from the office for less than 60% of the time won’t receive any variable pay. Employees attending office between 60-75% of the time will receive 50% of the variable pay, while those attending 75-85% of the time will be eligible for 75%. Only employees with office compliance levels above 85% will receive full variable pay.
| Work from office compliance | Variable pay impact |
| 85% and above | Will receive full variable for the quarter |
| 75% to 85% | Eligible for 75% of variable pay |
| 60% to 75% | Will receive 50% of variable pay |
| Less than 60% | No bonus for the quarter |
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Non-compliance with 85% office attendance requirement will lead to disciplinary action, according to the policy. Employee compliance will be reviewed quarterly, with implications on annual performance reviews, compensation, and career progression for violators.
What about other IT giants?
Unlike TCS, Infosys and Wipro haven’t tied variable payouts to returning to the office. Wipro distributed an average variable payout of 85% for the March quarter, consistent with the previous quarter’s 85% variable pay for junior employees.
TCS expects employees to work from the office all five days, becoming the first major Indian IT firm to take action against non-compliance by reducing city allowances for those not attending the office full-time.
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