HCLTech has amended its HR policy regarding employee compensation in which salaries of some employees will be reduced.
Amended policy
The IT company has changed its policy related to Engagement Performance Bonus which is part of the variable pay of the employees.
Per the original version of the policy, employees were paid EPB on a monthly basis.
Now with the change, EPB would only be paid on a quarterly basis.
Moreover, employees on the bench would not be eligible to receive EPB, which would in turn reduce their monthly salary.
As communicated through email
This information was communicated to employees via email which read, “Employees will be paid EPB basis the Quarterly Manager Feedback in My Performance effective 1st April,2023.
Key performance parameters, targets will be defined.
At the end of every quarter, score-based performance review will be triggered.
Employees on bench will not be eligible for EPB payout for the period they are on bench.”
The new policy stated that employees would be ineligible to receive EPB if they quit mid- quarter
“Achievement is computed on a quarterly basis, if the employee resigns during the quarter, no EPB amount will be paid for that quarter”, read the email.
Company statement
Confirming this development a company spokesperson said, “At HCLTech, we have always offered an Engagement “Performance” Bonus (EPB) as part of our total compensation package up to the E3 band.
The EPB is typically 3-4 percent of total compensation, and the average payout is approximately 80 percent.
Our employment contract identifies EPB as performance-linked variable pay, and this is governed by company policy.
To support employees during the pandemic, the company made a policy exception and paid 100% EPB irrespective of performance.
Post-pandemic, the company is reverting to the original policy. This has been communicated to our employees.”
NITES Files Complaint With IT Ministry
Pune based IT Employee Union NITES has filed complaint against this decision with IT MInistry.
Harpreet Singh Saluja, President, Nascent Information Technology Employees Senate NITES said, “NITES has submitted a complaint to Ministry of Labour and Employment Government of India against HCL Technologies. We have requested the ministry to investigate this matter thoroughly and take appropriate action against HCL Technologies for its violation of ethical employment standards. We believe it is essential to safeguard the rights and well-being of employees, ensuring that companies are held accountable for their actions. By addressing this complaint, the Ministry of Labour can set a precedent that promotes fair and equitable practices within the IT industry.”
Broken promises?
Employees union did not take this development well.
They believe the alterations which have resulted in a cut in salaries contradict the promises made by the company during recruitment.
President of the employee union Nascent Information Technology Employees Senate (NITES), Harpreet Singh Saluja said that they would be filing a complaint against HCLTech in the Labour Ministry.
Under the previous policy
He said that under the previous policy the firm assured its employees that the EPB would be paid at a fixed rate on a monthly basis, regardless of whether employees were on the bench or actively engaged in projects.
This provided a sense of stability and security among its workforce.
However it has suddenly introduced changes and implemented a quarterly performance review process to determine EPB payouts.
Reason behind filing complaint
Saluja said, “The new policy now links EPB payouts to employee ratings, which range from 80-90% for top performers to a mere 30-40% for the lowest performers.
Additionally, employees who are on the bench will not receive any EPB payout at all.
Consequently, these unexpected changes have caused significant financial losses for the affected employees.”
He further said, “NITES is in the process of filing a complaint with the Labour Ministry against HCLTech regarding their changes in the EPB policy, urging them to take appropriate action to safeguard the interests of IT employees.
We believe it is essential to hold companies accountable for their actions and ensure that the rights and well-being of employees are protected.”
The union calls upon the management to reconsider their decision and reinstate the previous EPB policy, which provided fair and consistent compensation to all employees
