TCS offers 100% variable pay for its 600,000 plus employees

The decision comes at a time when its smaller peers Infosys and Wipro have reduced or suspended variable pay rollout for employees owing to margin pressure.

TCS too had delayed the June variable compensation payout by a month for employees in the C3A, C3B, C4 and equivalent grades by a month, according to a report in The Economic Times.

The money due to be paid in July to employees at the assistant consultant, associate consultant, and consultant levels, will now be paid by August-end, the ET report stated citing an internal email.

The decision comes at a time when its smaller peers Infosys and Wipro have reduced or suspended variable pay rollout for employees owing to margin pressure.

Infosys has managed to give out 70 per cent variable pay on average to employees for the June quarter despite pressure on its operating margin. The squeeze reflected on the quarterly performance bonus payout, the IT firm said in an internal mail.

Last week, Wipro said in an email that employees belonging to C bands and above (managers to C-suite level) will not receive any variable payouts, while associates in A and B bands (freshers to team leader levels) will receive 70 per cent of target variable pay for the quarter subject to a billability threshold.

“Variable pay is either paid in month one or month two as per the normal process and there is no delay in this process. 100 per cent VA is being paid for Q1,” TCS said in a statement. 

The company had earlier said its compensation and bonus cycle was running as planned.

Over 90 per cent of employees have reportedly received their variable payout.

Reports citing people aware of the developments said the delay was an “administrative” issue arising from the size of the workforce being covered and was not linked to any margin pressure.

During the June quarter, Indian IT majors had indicated a strong demand environment but reported severe margin contraction due to high wage costs.