TCS is increasing the proportion of variable pay that’s linked to performance


According to Economic Times Reports, India’s IT Major TCS is also increasing the proportion of variable pay that’s linked to performance for experienced engineers as part of the rejig.-

The process called Pyramid Rationalization — is predicated on having a larger number of employees with less than four years of experience and fewer employees with progressively more experience, and as a result, a reduced salary bill.

The employee pyramid is the cornerstone of Indian IT’s margin management. IT companies such as Cognizant and Infosys have also talked about pyramid restructuring as part of their strategy to lower costs.

“There are many people who have been in the organization for many years. This (model) keeps getting refreshed, recalibrated, relaunched every few years,” TCS CFO V Ramakrishnan said in an interview, pointing out that the company was a 50-year-old organization.

“TCS is not talking about that (job cuts and VRS) to maintain the Pyramid, The cost structures can be more performance-oriented. How we can do this in a calibrated manner, how we get do it more deeply in the organization — that will be the measure of success,” he added in his interview.

The company has already tied pay to performance at different levels and different parts of the organisation. “So, we will see how to make it even more granular. That is one of the things we will do,” he also said.

Tata Consultancy Services (TCS) is also providing opportunities to employees within the system to prove their skills and upgrade their roles within the organization, something that was earlier open only to campus recruits.

Campus recruits can also aim to double the existing entry-level package by proving their skills through the TCS national qualifier tests (TNQT).


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