COMPENSATION STRATEGY OF

Presented By-

Juhi Priya

Monica

Aakriti Piyoosh Bajoria

ABOUT TCS• Industry IT services , IT consulting• Founded 1968• Founder(s) J R D Tata• Headquarters Mumbai, Maharashtra, India• Key people Ratan Tata (Chairman)

N. Chandrasekaran (CEO & MD)

• Revenue  US$ 10.17 billion (2011/12)• Profit  US$ 2.2 billion (2011/12)• Employees 254,076 (Sep 2012)[2]

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• TCS is one of the largest private sector employers in India, and the second-largest employer among listed Indian companies (after Coal India Limited).

•  In the 2011/12 fiscal year TCS recruited a total of 70,400 new staff, of whom 61,055 were based in India and 9,345 were based in the rest of the world.In the same period a total of 30,431 staff left employment with TCS, leaving a net increase of 39,969, of whom 36,232 were based in India and 3,737 in the rest of the world.

•  TCS has announced plans to recruit 60,000 graduates in the 2012/13 fiscal year.

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Compensation Management

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Major components of compensation systems

• Basic Wage and salary plans.• Incentives • Employee benefits.• Performance-based pay

“Compensation management is a strategic activity that helps an organization improve the effectiveness of its employee reward processes. “

Types of Compensation

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Direct Compensation

• Wages• Salaries• Commissions, Bonuses, Gainsharing, Profit Sharing

Indirect Compensation

• Pay for Time Not Worked (vacation, sick leave, holidays, etc.)• Insurance Coverage (medical, dental, life, etc.)• Income Security (pensions and disability)• Services(education assistance, child care, recreation, discounts, etc.)

EVA compensation model for TCS

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TCS adopted EVA aimed at creating economic value by concentrating on long term continuous improvement.

This model measured operating and financial performance of the organization.

Basis for giving compensation to employees.

To assess employees’ contribution, at the company.

Component of fixed and variable pay were determined

Fixed Pay- wages, pension. Variable Pay- bonus, profit sharing and stock options.

TCS Employee Satisfaction(2003-04)

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Parameter Industry average

TCS

Company Image 9.3 9.6

Job Content Growth 9.1 9.9

Training 8.7 10.0

Salary & Compensation 8.2 8.8

Appraisal System 8.8 9.7

People In company 9.1 9.5

Overall Satisfaction 9.2 9.8

Pay and Performance Relationship

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Employeeexpects

Pay

Performanceis

evaluated

Employeeconsiders equityof performance,

pay

Employee

performsjob

Employee sets new expectations

based on previous experiences

Feedback to employee

Incentives Take Home

Doesn’t always need to be “show me da money!”

• Most simple and best option is have doable goals and agreement with them.

• Recognizing an employee’s contribution is a simple tool.

• On a day-to-day basis, you can use:

Having fun part of workJob rotation

Expression of appreciation in front of othersBigger desk

Note of thanksChallenging work assignments

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EVA MODEL BY TCS

FIXED VARIABLE

STOCK OPTION

PROFIT SHARING

BONUS

PENSION

WAGE

COMPENSTION MANAGEMENT

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Incentive Plans

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1. Individual-In this plan output of each worker can be accurately measured.

2. Group- In this plan output is calculated in group. Ex-electrical industry. Advantages of group Incentives are-

1.Better co-operation among workers.2.Less supervision.3.Reduced incidence of absenteeism.4.Reduced clerical work.5.Shorter training time.

Disadvantages are

1.An efficient worker may be penalised for the inefficiency of the other members in the group.2.Rivalry among the members of the group defeats the very purpose of team work and co-operation.

Incentive Schemes In Indian Industry

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1.In 1946 incentives plans were introduced in our country.

2.Incentive scheme differ from industry to industry and plant to plant within an industry.

3.The schemes in public sector plants have an extremely varied coverage.

4.Inflation has reduced the motivational effect of incentives.

5.In many industry incentives have achieved their objectives ,i.e. increased productivity and enhanced earnings.

Benefits and Services

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Treats• Free

lunches

• Festive bashes

• Coffee breaks

• Picnics

• Dinner with boss

• Dinner for the family

• Birthday treats

Knick-Knacks• Desk

Accessories• Company

watches• Tie Pins• Broaches• Diaries/

Planners• Calendars• Wallets• T-shirts

Awards• Trophies• Plaques• Citations• Certificat

es• Letters of

appreciation

Office Environment• Redecora

tion• Office

with a window

• Piped music

• Flexible hours

Social Acknowledgement• Informal

Recognition

• Recognition at office

On the job • More

responsibility• Job rotation• Special

assignments• Training• Representing

the company at public fora

Tokens• Movie

ticket• Vacation

Trips• Coupons

redeemable at stores

• Early time-offs

• Anniversary, dating and birthday allowances/presents

Cafeteria Benefit Plan

Employees are given the choice to select the benefit schemes

Customize benefit programme after assessing employee needs and preferences

Potential choices : cash, retirement plan contributions, vacation days, and insurance.

Example one employee may wish to take health care insurance, while another employee may wish to take life insurance.

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TATA CONSULTANCY SERVICESSALARY INFORMATION

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Annual Base Salary Rs. 164959 per anum

1. Basic 65984

2. HRA 32992

3. Medical Reimbursement (On submission of bills)

15000

4. Transport Allowance 9600

5. Shift Allowance 19800

6. Special Allowance 21584

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Other Benefits

1. Provident Fund @ 12% on the basic (employer contribution) 7918

2. ESI @ 4.75% (employer contribution) 7123

Annual Gross Salary 180000

Performance Incentives

Incentive Potential upto 20% of Annual Base Salary on successful completion of Expected Business Results, payable quarterly.

Gratuity as per Payment of Gratuity act, 1972

3174

Mediclaim Insurance premium for Self plus 5 dependents

9000

Personal Accident Insurance coverage premium 500

Food & Refreshments 7920

Additional Benefits Annual

THANK YOU

Piyoosh Bajoria