In 1996, TCS was organized into a three dimensional model with the first dimension comprising of industry practices,

which included engineering, transportation and telecom; the second dimension comprising of service practices like e-business, outsourcing, technology consulting; while global and regional operating areas formed the third dimension. A business unit could be a part of a service, a practice, a geographical unit or a combination of all the three. Every unit was considered to be a revenue center and had its own EVA target. The units that did not fall under the purview of any of these were corporate offices and research & development, the costs of which were divided among all the units. Through EVA-linked compensation, employees could claim stakes at three EVA levels - at the organization level, at the business unit and the individual level. The individual was informed how he or she could contribute to the EVA enhancement at all three levels. EVA was controlled by revenues, capital and costs, and an individual could contribute in any or all of these areas at all the three levels... The Benefits The benefits of EVA were realized across all levels in the organization. Employees became aware of their responsibilities and their share in increasing the EVA of the unit and organization. All the units could determine how they had fared against the targets. The bonus banks also helped in sustaining performance from the individuals, with close relationship between pay and performance. There was an increased sense of belonging among the employees and the employees were motivated to increase their contribution as they were also equally benefited by the increase in EVA. EVA was not just a performance metric but an integrated management process aimed at achieving long term goals. One of the major benefits of implementing EVA in TCS was increased transparency in the organization. The internal communication within a unit had increased considerably. The decision making process became more decentralized... The Drawbacks The EVA-based compensation system received severe criticism during the initial years of its implementation. Industry analysts commented that EVA concentrated mainly on return on

investments, due to which the growth of TCS could be restricted. In 2003, TCS caused an uproar in the IT industry when it reduced the variable salaries of employees by 10%. This was the initial impact of EVA which was implemented in the company from April 01, 2003. The reduction in the variable salary resulted in an overall reduction of monthly take-home salary for most of its employees...

REWARD SYSTEM IN TCS TCS gave utmost importance to its human resource function. The companybelieved in the premise that "good ideas can come from any level of theorganization and teams can do better than the individuals." TCS have adopted EVAreward system.In 1996, TCS was organized into a three dimensional model with the firstdimension comprising of industry practices, which included engineering,transportation and telecom; the second dimension comprising of service practiceslike e-business, outsourcing, technology consulting; while global and regionaloperating areas formed the third dimension.A business unit could be a part of a service, a practice, a geographical unit or acombination of all the three. Every unit was considered to be a revenue center andhad its own EVA target. The units that did not fall under the purview of any of these were corporate offices and research & development, the costs of which weredivided among all the units. Through EVA-linked compensation, employees couldclaim stakes at three EVA levels - at the organization level, at the business unit andthe individual level. The individual was informed how he or she could contributeto the EVA enhancement at all three levels. EVA was controlled by revenues,capital and costs, and an individual could contribute in any or all of these areas atall the three levels.The benefits of EVA were realized across all levels in the organization. Employeesbecame aware of their responsibilities and their share in increasing the EVA of theunit and organization. All the units could determine how they had fared against thetargets. EVA was not just a performance metric but an integrated managementprocess aimed at achieving long term goals. One of the major benefits of implementing EVA in TCS was increased transparency in the organization. Theinternal communication within a unit had increased considerably. The decisionmaking process became more decentralized. In 2003, TCS caused an uproar in theIT industry when it reduced the variable salaries of employees by 10%. This wasthe initial impact of EVA which was implemented in the company from April 01,2003. The reduction in the variable salary resulted in an overall reduction of monthly take-home salary for most of its employees he case examines the compensation management system at-Tata Consultancy Services (TCS)based on the EVA model. The new methods help to identify the non-performers and to retaintalents. They used for giving incentives and rewards. HR experts believed that this decision wasbased on the implementation of the EVAa-based model for assessing employees' contributions atthe company.TCS started its operations in 1968 as a division of Tata Sons Limited. During first two decadesof its operations TCS faced many hurdles due to rigid government license system. F.C. Kohliwas the first CEO of TCS. At that time, the company had 10 consultants and 200 operators whocarried out IT assignments in Tata group companies. One of the first assignments that TCSundertook was the punch card managements system for Tata Iron and Steel Company (TISCO).There is a talent pool comprising of experts in areas like HRD, MIS, Materials Management,software consultants etc. after that there is a great growth in the company and it offered ITsolutions to many sectors like banking, retail, financial services, media, etc. TCS aimed toachieve high revenue growth and maintain its leadership. TCS adopted the Balanced Scorecard8approach to monitor and implement strategy, and the Tata Business Excellence Model (TBEM)'for quality and customer focus.The mission of the company, "The role of HR is to provide the context for energizing anddeveloping people to play effective roles in ensuring that TCS becomes one of

the top globalconsulting firms- Towards achieving this we will identify, develop, facilitate, and measure thehuman and technological processes in the pursuit of excellence. We will foster the values of theTata group."TCS adopted in 1999 when the company had a staff of around 15000. TCS aimed at creatingeconomic value by concentrating on long-term continuous improvement. The EVA framework of TCS was developed to integrate the corporate value with the performance of business units.Through EVA, TCS planned to focus on creating value and maximizing profitability. Accordingto the EVA model, the total corporate value depended on the performance of business units andthe performance of the people in those units.Initially, TCS had set up a working committee comprising of senior executives from differentdepartments to determine EVA targets for the organization, business units and individuals.They deliberated upon a wide range of issues regarding the implementation. The employees werefamiliarized with the concept during 2000-01 through a pilot exercise.In the EVA-linked compensation, employees were part of EVA at three levelsat the organizationlevel, at the business unit and the individual level. TCS took a clear stand on Employee Stock Options (ESOPS). ESOPS were offered to only a few employees while most of the employeeswere under the purview of EVA. Eva was not a performance metric but an integratedmanagement process aimed at achieving long-term goals. Due to EVA in TCS, there is anincreased transparency in the organization. The internal communication within a unit hadincreased considerably. The decision-making process became more decentralized. Theperformance of the individual was given importance and those who failed to perform were given

necessary training to improve themselves. TCS had one of the lowest attrition rates among theIndian IT companies.

Eva based compensation plan is designmend for the employes. Buildi d scheme requires a detailed exercise in arriving at the target.the framework had specifications fr target eva , wd carefully defined eva intervals n provision fr the positioning of zero eva the gradation continued thru incentives correspondin target attainment the double incentive . tcs also implements d bonus bank at d indivi level Continued at file HR management TCS :BIGGEST &BESTGETTING BIGGER WWW.COOLAVENUES.COM/KNOW...