Tata Consultancy Services (TCS) has introduced a policy linking employees’ quarterly variable pay to their office attendance. This measure aims to encourage employees to return to the office rather than penalize them, according to TCS Chief Human Resources Officer Milind Lakkad. Employees with less than 60% attendance will not be eligible for the quarterly bonus, with the policy structured into different slabs based on attendance percentages.
Details of the Policy
TCS has set up a tiered system for variable pay based on attendance:
- 75-85% Attendance: Employees will receive 75% of their quarterly variable pay.
- 60-75% Attendance: Employees will receive 50% of their quarterly variable pay.
- Less than 60% Attendance: Employees will not be eligible for the quarterly bonus.
Company’s Perspective
Lakkad emphasized that the policy is not intended as a punitive measure but as a last resort to help employees understand the value of coming to work. He stated, “This is not something that we want to do to punish people… The last measure we have taken to basically make sure that people who do not understand or have not yet understood the value of coming to work, they do understand.”
Current Impact
The policy has already shown significant results, with nearly 70% of TCS employees now working from the office. Lakkad expressed satisfaction with this outcome and mentioned that the company is on track to achieve its target number of employees working from the office. The decision on whether to continue the policy beyond the current quarter is still under consideration.
Financial Performance
TCS reported a 9% increase in net profit for Q1 FY25, reaching ₹12,040 crore, compared to ₹11,074 crore in the same quarter of the previous year. The company’s board also announced an interim dividend of ₹10 per equity share, to be paid by August 5.
Feedback and Future Plans
Lakkad clarified that any variable pay withheld due to attendance is redistributed among employees who meet the attendance criteria. He reiterated that the company does not use the withheld funds for other purposes. The continuation of the policy will be determined based on its effectiveness and impact on employee attendance.
