Tata Consultancy Services (TCS), the largest IT services firm in India, has reduced the variable compensation for senior employees for the third quarter ending December 2024 (Q3 FY25), despite their compliance with the company’s work-from-office policies, as reported by insider sources. This marks the second consecutive quarter in which variable pay has been diminished.
In the prior quarter, from July to September, certain employees received only 20-40 percent of their quarterly variable allowances (QVA), while others received nothing at all. This was significantly lower than the nearly 70 percent QVA distributed in the first quarter of FY25.
One employee expressed, “I was expected to receive between Rs 50,000 and Rs 55,000 in QVA, but I only received half last quarter, and this quarter it was even less, at a quarter of that amount,” according to the report.
Another source indicated that nearly 100 percent of the QVA was allocated to 70 percent of the workforce, primarily junior employees, while the remaining 30 percent of senior staff received their payouts based on the performance of their respective business units.
Last year, TCS established a connection between office attendance and the variable pay of employees. The human resources policy was revised to require a minimum of 85 percent attendance in the office for employees to qualify for the full quarterly variable compensation.
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