EVA and Compensation Management System at Tata Consultancy Services
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Case Details:
Case Code : HROB075
Case Length : 14 Pages
Period : 1998-2005
Pub. Date : 2005
Teaching Note :Not Available Organization : Tata Consultancy Services
Industry : Information Technology
Countries : -
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HROB075) click on the button below, and select the case from the list of available cases:
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Excerpts
The HR Policies
TCS gave utmost importance to its human resource function.
The company believed in the premise that "good ideas can come from any level of
the organization and teams can do better than the individuals."
The mission statement of HR division at TCS states, "The role of HR is to provide the context for energizing and developing people to play effective roles in ensuring that TCS becomes one of the top global consulting firms. Towards achieving this we will identify, develop, facilitate, and measure the human and technological processes in the pursuit of excellence. We will foster the values of the TATA group." (Refer Exhibit II for Vision, Mission and Values of TCS).
In TCS, the HR division acted as a facilitator. The company had institutionalized all HR processes. TCS firmly believed that recruiting the right people was the secret of success of any organization especially when the supply of talent was much below the demand...
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The EVA Model
TCS adopted EVA in 1999, when the company had a staff of around 15000, working at several locations across the world. Through the EVA model, TCS aimed at creating economic value by concentrating on long term continuous improvement.
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EVA measured operating and financial performance of the organization and the compensation of all employees was linked to it. TCS went in for the EVA as during that time, the company was not a public limited company and hence could not have a stock option plan. There were several people who played an important role in the success of the organization, who needed to be recognized. As there was no wealth sharing mechanism in place, EVA was adopted to focus on continuous improvement rather than short term goals and also to motivate employees. Commenting on this, S Mahalingam (Mahalingam), CFO and Head Global Finance for TCS said, "We wanted to construct a defined incentive system, which would reward on the basis of profitability... |
Excerpts Contd... >>
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