Tata Consultancy Services (TCS) has awarded quarterly variable allowance (QVA) in the range of 60-70% to its mid- and senior-level employees for the April-June quarter, according to sources.
The payout in the fiscal’s first quarter is believed to be slightly lower than the previous two quarters. Mid-to-senior employees had received up to 80% of the QVA in the previous quarters. However, the IT major had since changed the metrics of payouts for these two levels. Apart from their own performance, the QVA criteria for mid-to-senior employees now also includes the performance of the verticals they work in.
As a result, experts say, the average payout for these two categories of employees is likely to have been impacted by the underperformance of certain verticals.
During the quarter, the company said that verticals like travel were impacted due to the continued conflict in the West Asia region. Overall, the consumer businesses saw a decline of 4%.
TCS has nearly 600,000 employees, a bulk of them at junior levels. Eligible employees in this category are believed to have received 100% payout.
TCS also links variable pay to office attendance. Employees need at least 85% office attendance to qualify for the full payout, while those with lower attendance receive a reduced amount; employees below 60% attendance are ineligible for the quarterly bonus.
Earlier this week, Infosys rolled out an average performance bonus of 70% to eligible employees for the first quarter of FY27, similar to the previous quarter’s payout and 10 percentage points lower than the year ago.
Infosys employees rated ‘commendable’ received close to 80% of their incentive, while those rated ‘met expectations’ got around 65%. In the March quarter the company paid an average performance bonus of 70%, down from 85% in December—the highest level in recent quarters.
The Indian IT industry is undergoing a structural shift as delivery models continue to evolve due to the impact of artificial intelligence offerings. As part of this transformation, the workforce is also undergoing a shift in skilling and deployment. Companies are also exploring inorganic avenues to grow AI capabilities, as seen in recent acquisition deals by companies like TCS, Coforge and HCLTech.