TCS introduces 60% work from office attendance policy for variable pay allocation; Here's how it works

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Tata Consultancy Services (TCS) has introduced a revised variable pay policy that integrates employees' office attendance as a key factor. The updated policy, implemented post the company's quarterly results, establishes four attendance slabs dictating the variable pay for employees.

Updated Variable Pay Structure

According to the new policy, employees working from the office for less than 60% of the time will not receive any variable pay for the quarter. Those with an office attendance between 60-75% will receive 50% of the variable pay, while employees attending the office 75-85% of the time will be eligible for 75% of the variable pay. Only those with office compliance levels above 85% will receive the full variable pay for the quarter.

Response to Return-to-Office Mandate

TCS had earlier announced a return-to-work mandate, with Business unit heads indicating that assigning grades, a prerequisite for promotions, will depend on their track record of working from office.

"Employees' compliance to work from home will be reviewed every quarter. In the event an employee is found to be in violation of the laid down policies, there will be implications on the annual performance review, compensation, and career progression of the employee," the policy stated. An email sent to TCS on the updated policy didn't elicit a response till the time of going to press.

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Disciplinary Action for Non-Compliance

The policy also cautions that continuous non-compliance with the 85% work from office requirement will lead to disciplinary action. An email sent to TCS regarding the updated policy did not receive a response at the time of publication.

CEO's Encouragement

In their communication following the March quarter results, CEO K Krithivasan and CHRO Milind Lakkad emphasized the importance of returning to the office. Krithivasan highlighted the benefits of shared experiences, learning, collaboration, and camaraderie that result from working in a shared physical space.

Krithivasan said, "The last quarter has seen most of you return to the workplace, creating shared experiences, nurturing greater learning, collaboration, and camaraderie."

"We are still calibrating the total freshers we want to hire for FY25. Our plan is to get to the 40,000 number, but we will see how it goes," said Milind Lakkad, chief HR officer, TCS.

Krithivasan highlighted that almost 65% of TCS associates are now attending the office 3-5 days a week, just a quarter after the policy's implementation, setting TCS apart from its industry peers.

He emphasized that the primary objectives behind the "return to office" approach are to ensure associates receive the best value and to preserve the "organizational culture."

Krithivasan expressed optimism that, with the positive incentives provided, a majority of employees will be back in the office within the next couple of quarters.

Industry Comparison

Unlike TCS, other major Indian IT firms such as Infosys and Wipro have not tied variable payouts to the return to office mandate. Wipro has distributed an average variable payout of 85% for the March quarter of FY24, consistent with the 85% variable pay given to junior employees in the Dec quarter.

The implementation of TCS's updated variable pay policy underscores the company's stance on the return to office work. The move is intended to motivate employees to return to the office, underscoring the importance of in-person collaboration and organizational culture.

In summary, TCS's new policy intertwines variable pay with office attendance, encouraging employees to return to the office for a more collaborative work environment. This initiative aligns with TCS's commitment to maintaining its organizational culture and ensuring optimal performance.

(With inputs from TOI)

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