IT services company, Tata Consultancy Services, recently rolled out annual salary revisions for employees, but the reaction inside the company has been far from celebratory. While top-rated performers were promised better increments, many workers say the updated compensation format has created confusion over actual earnings and take-home salary. Employees who reviewed the revised compensation letters said in a Mint report that the company has introduced notable changes in how variable pay is calculated, especially by connecting parts of compensation to office attendance and deployment-related metrics.
According to compensation documents reviewed by employees, the company has shifted the work-from-office-linked variable component into a newly defined “performance pay” category. This segment is reportedly tied to attendance levels and deployment metrics rather than being part of the earlier performance bonus structure, added the company.
As per the report, one of the compensation letters stated: “You will be eligible for a performance pay of up to Rs 64,800 per annum based on your individual performance and other organisational imperatives like Work From Office Index (WFO), Deployment Index (DI), etc, as communicated from time to time. Performance pay will be paid proportionately after adjusting for organisational imperatives mentioned above.”
The timing of the move is significant, particularly amid renewed national conversations around remote work after recent comments by Prime Minister Narendra Modi.
Employees Say Salary Revisions Are Difficult To Understand
Several employees have expressed uncertainty about the revised salary structure, saying it is difficult to determine how much their actual monthly income will increase after the changes. Performance bonuses, which were previously distributed quarterly, may now shift to an annual payout system. The updated structure reportedly removes the office attendance requirement from this bonus component, states the report.
Another compensation letter said, as per the report: “The percentage of the potential amount to be paid for the quarter/year is decided and announced after the close of the quarter/year based on the Company, Unit performance and other factors during the applicable period.”
The same letter added: “Eligibility for this component of the Variable compensation is based on multiple factors such as the grade and performance of the individual, one’s capability development in line with organisational requirements, fluidity demonstrated by the individual per laid guidelines, performance of the company and respective unit, and adherence to organisational policies, guidelines and imperatives as communicated from time to time.”
Employees also pointed to structural revisions involving allowances and gratuity components. Some said earlier benefits, such as meal coupons, travel reimbursements, and fuel allowances, appear to have been discontinued or redistributed under new categories.
“The bouquet of benefits, which included house rent allowance, meal coupons, fuel and travel allowances, has now been scrapped, whereas house rent allowance has been given a separate column in the salary slip. We don’t know how these have been done,” said a second executive with knowledge of the matter in the report.
Top Performers Disappointed Despite Hike Rollout
Last month, the company had indicated during its earnings discussion that eligible employees would receive salary hikes effective 1 April, with exceptional performers expected to secure double-digit increments. However, several employees said the actual hikes have been lower than expected. According to staff members, top performers have received raises of up to 6 per cent, while lower-rated employees have reportedly faced salary cuts, added the report.
“I have been a top performer for two years. I was given the A-band this time around, but still I only got a 6 per cent hike in salary,” said one executive in the report.
The company is currently issuing revised salary letters to employees up to the C3A level, generally covering professionals with seven to ten years of experience. Senior-level employees are still awaiting communication regarding increments.
The developments come during a challenging phase for the broader IT services industry, where automation and AI-led efficiencies continue to reshape demand patterns. TCS reported annual revenue of $30.02 billion last year, marking a marginal decline of 0.5 per cent and its first yearly revenue drop.
