Abstract

The case examines the compensation management system at TCS based on the EVA model. With the implementation of EVA based compensation, the salary of employees comprised of two parts - fixed and variable. The variable part of the salary was arrived after considering Corporate EVA, Business unit EVA and also individual performance EVA. The new system was implemented successfully and it helped the company identify the non-performers. The company also benefited a great deal in retaining talent. However, it also received criticism from several quarters for ‘putting golden handcuffs on excellent performers.’

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the compensation management system at TCS
• and Analyze EVA as a performance measurement tool.

Keywords

Tata Consultancy Services, Compensation Management, EVA, HR Policies, Fixed Pay, Variable Pay, Recruitment, Incentives, Employee Satisfaction, Employee Stock Options, Best IT Employer in India, Attrition in IT Industry, Performance Improvement Plan, Balanced Scorecard