HCLTech has no plans to link variable pay to office attendance, says CEO C Vijayakumar

HCLTech CEO and MD C Vijayakumar

HCLTech chief executive officer and managing director C Vijayakumar isn’t looking to link variable pay of employees with their attendance in office, despite India’s third-largest IT services company asking staff to be in office thrice a week or face disciplinary action.

The comments come at a time when rival Tata Consultancy Services (TCS) has linked its quarterly variable pay component to the employee’s attendance in office. Having less than 60 percent attendance could lead to forfeiting of this pay out and consistent violation could bring to strict disciplinary actions.

In an interview to Moneycontrol, Vijayakumar said, “Return to office continues to increase, and it varies from business line to business line. Some business lines, we're able to comfortably work remotely. And for some business lines, we think getting people back to work is the right strategy. We don't have any such plans to link variable compensation with bringing people to office.”

While TCS also expects its employees to work from office five days a week, HCLTech still continues to operate in a hybrid model with three-days from office policy.

HCLTech’s chief people officer Ramachandran Sundararajan had said variable pay is not a big cost for the company. He had shared that quarterly variable pay is less than 3 percent of the annual compensation of the individual.

“The quarterly variable pay is only applicable for the junior level employees and not the mid and senior levels. And there is no significant shift in that decision, it’s the same quarter on quarter,” Sundararajan said during the company’s Q1 earnings conference on July 12.

By linking variable pay to attendance, TCS has got 70 percent of its workforce to offices, chief human resources officer Milind Lakkad said. TCS on-boarded nearly 40 percent of its current employee base during the Covid pandemic years and not many of them had been to office. The company also clarified that this could be a temporary measure.

“This is not something that we want to do to punish people. This is the last measure we have taken now to basically make sure that people who do not understand or have not yet understood the value of coming to work, they do understand,” Lakkad told Moneycontrol in a recent interview.