Tata Consultancy Service (TCS) to pay 100 pc variable salary to employees after a great Q3 result

After notching up stupendous results, India’s largest IT services provider Tata Consultancy Service (TCS) has rolled out 100 per cent variable pay for its employees for the quarter ending December 2020.

In a note to the employees of his company, Milind Lakkad, Chief Human Resources TCS said, “We will be paying 100 per cent of the Quarterly Variable Allowance (QVA) this quarter (Q3) for all grades applicable under this plan. The company gives QVA based on its quarterly performance. 

While the 100 per cent variable pay is not uncommon, according to the employees of TCS, it is not usually across the board. It is said that it is usually
50-60 per cent.

Let us put this in a broader fashion. Variable pay across the board has come due to the strong growth the company saw in the seasonally weak December quarter. This was driven by increased tech spending by clients at the back of COVID-19, broad-based growth across sectors and geographies and also increased outsourcing opportunities.

For the December 2020 quarter, the company’s revenue grew 2.1 per cent y-o-y to $5.7 billion after declining 7.8 per cent and 2.1 per cent in Q1 and Q2 respectively. TCS is confident about getting back on to a double digit growth trajectory in FY22 as it anticipates a multi-year technology transformation cycle.