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Eva And Compensation Management System At Tata Consultancy


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Eva And Compensation Management System At Tata Consultancy

  1. 1. EVA And Compensation Management System At Tata Consultancy Services<br />BY:<br />Tanmay Jauhary<br />Sep 8th , 2009<br />
  2. 2. Facts About TCS<br />Management consultancy division was made part of TCS<br />Adopted EVA compensation system in 1999<br />TCS adopted TBEM based on Balanced scorecard approach.<br />TCS became 1st Indian Company to implement PCMMlevel 4(People Capability maturity model) which was improved to PCMM level 5 in 2005.<br />
  3. 3. Facts…<br />Ranked Very High in Employee Satisfaction compared to its competitors by Data Quest in 2004.<br />TCS had lowest attrition rate, employee turnover rate was only 7.9% in 2004, against the Industry rate of 15%.<br />Forced employee retention through Bonus Bank<br />1000 employees were laid off on the basis of poor performance over 2 years in 2005-06.<br />
  4. 4. Tata Business Excellence Model<br />Leadership<br />Strategic Planning<br />Customer & market focus<br />TBEM<br />Business result<br />Knowledge management<br />Process Management<br />Human Resource Focus<br />
  5. 5. Good Control At TCS<br />Adopted Waterfall Selection Process and Centralized Training System<br />Mixed Control system<br />EXTERNAL<br /><ul><li>Reward System.
  6. 6. Training For Poor performers</li></ul>INTERNAL<br /><ul><li>Empowerment Of Employees
  7. 7. Emphasis on Team Work</li></li></ul><li>Good Control…<br />Compensation Structure of EVA.<br />Employee<br />Department<br />Enterprise<br />Value Addition<br />Value Addition<br />Top level<br />Esteem Needs<br />40%<br />60%<br />Bottom Level<br />50%<br />50%<br />Technical skills<br />Conceptual skills<br />40%<br />60%<br />Reputation concerns<br />Top level<br />Basic Needs<br />Bottom Level<br />
  8. 8. Bad Control - 1<br />EVA was based on Cost, Revenue and Capital Involved in Units.<br />Employees got compensation on the Basis of Unit performance, if unit did well employee will also get high benefit.<br />Why should I pay for the Project 2 investment ?<br />EVA<br />EVA<br />
  9. 9. Solution - 1<br />Start EVA compensation on project basis.<br />Competitiveness among Employees to perform better so to grab better projects.<br />EVA<br />EVA<br />EVA<br />
  10. 10. Bad control - 2<br />Adopted lay off policy, which resulted in:<br /><ul><li> Negative perception about company {across industry only 3.6% employees considered TCS as their Dream company.
  11. 11. Fear to loose potential performer, who was working with underperforming team.</li></li></ul><li>Solution - 2<br />Conducting Exit interview, to retain the potential performer<br />Outplacement of employee, if possible. It would help them in keeping its reputation up.<br />
  12. 12. Thank You !<br />