TCS HR chief Milind Lakkad says linking variable pay with bonus not to punish staff, aimed to boost ‘return to office’

Tata Consultancy Services' (TCS) decision to link variable pay with work from office attendance was not to punish the employees but to encourage a return to office culture, its Chief Human Resources Officer (CHRO), HR Milind Lakkad, said. 

TCS has linked its quarterly variable pay with attendance according to which employees of the company with less than 60 per cent attendance will not be eligible for the quarterly bonus.

TCS has broken the variable pay policy down into different slabs. Employees with 75 to 85 per cent work-from-office attendance will get 75 per cent of their quarterly variable pay. Employees attending office less, with attendance between 60 and 75 per cent, are slated to get 50 per cent of their variable pay, as per a Mint report on July 11.

“This is not something that we want to do to punish people. This is the last measure we have taken now. 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,” Lakkad said in an interview to Moneycontrol.

The company said in its Q1 earnings report that almost 70 per cent of employees are already working from the office due to the current policy of associating variable pay with attendance. Lakkad said that the company will soon achieve its target number of employees working from the office.

“We have come to a point where with just 70% plus number I'm very happy. The point of whether we continue for one quarter, two quarters, three quarters or for the year is something we'll decide,” he said.

TCS is still unsure whether to continue with linking variable pay to attendance.

“Whatever variable pay is taken out is fed back to the people who are coming in. It is not that the company is using that money in any other way, but it is going back to the people,” he added.

On July 11, 2024,TCS reported a 9 per cent rise in net profit to ₹12,040 crore for the Q1 FY25, compared to ₹11,074 crore in the same quarter of the previous year. The company's board announced an interim dividend of ₹10 per equity share to be paid by August 5.