Indian IT major HCLTech has recently changed its HR policy related to employee compensation, which has led to reduction in salaries of employees, Business Today has learned from sources.
The Noida-headquartered IT company has changed its policy related to Engagement Performance Bonus. Engagement Performance Bonus is part of the variable pay of the employees. As per the previous version of this policy, employees were paid EPB on a monthly basis. Under the new policy, EPB would only be paid on a quarterly basis. Moreover, employees on the bench would not be eligible to receive EPB, which would in turn reduce their monthly salary.
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This information was communicated to employees via email, which were accessed by Business Today. The email read, “Employees will be paid EPB basis the Quarterly Manager Feedback in My Performance effective 1st April,2023. Key performance parameters, targets will be defined. At the end of every quarter, score-based performance review will be triggered. Employees on bench will not be eligible for EPB payout for the period they are on bench.”
The new policy also stated that employees would be ineligible to receive EPB if they quit mid- quarter.
“Achievement is computed on a quarterly basis, if the employee resigns during the quarter, no EPB amount will be paid for that quarter,” stated the email sent to employees.
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HCLTech confirmed this development. A HCLTech spokesperson told Business Today: “At HCLTech, we have always offered an Engagement “Performance” Bonus (EPB) as part of our total compensation package up to the E3 band. The EPB is typically 3-4 percent of total compensation, and the average payout is approximately 80 percent. Our employment contract identifies EPB as performance-linked variable pay, and this is governed by company policy. To support employees during the pandemic, the company made a policy exception and paid 100% EPB irrespective of performance. Post-pandemic, the company is reverting to the original policy. This has been communicated to our employees.”
This development was not well received by employees. President of the employee union Nascent Information Technology Employees Senate (NITES), Harpreet Singh Saluja, told Business Today that they would be filing a complaint against HCLTech in the Labour Ministry.
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Saluja said: “NITES is in the process of filing a complaint with the Labour Ministry against HCLTech regarding their changes in the EPB policy, urging them to take appropriate action to safeguard the interests of IT employees. We believe it is essential to hold companies accountable for their actions and ensure that the rights and well-being of employees are protected.”
HCLTech reported 11 per cent rise in net profit at Rs 3,983 crore in Q4FY23. The company clocked 17.70 per cent YoY rise in net sales at Rs 26,060 crore for the quarter.
Dollar revenue of the IT major came in at $3,235 million, down 0.3 per cent sequentially. Revenue in constant currency (CC) terms de-grew 1.2 per cent QoQ . Ebit margin for the quarter stood at 18.1 per cent as against 19.6 per cent in December and 17.9 per cent in the year-ago quarter. Total contract value (new deal wins) for the quarter fell 8 per cent YoY to $2,074 million.
