IT services major HCLTech has revised its HR rewards and compensation bonus policy to turn the “engagement performance bonus (EPB)” component into variable pay from the current fixed 100 per cent bonus paid to all employees.
According to an internal email from the company, the management has informed employees about the updated policy that came into effect on April 23. According to the new policy, employees on the bench will not be eligible to receive the performance bonus, which may reduce their monthly salary.
The EPB will now be paid to employees based on a quarterly assessment from the managers instead of a monthly payment of the bonus provided earlier.
The company has completed the computation of the EPB bonus for May based on the outcomes of its performance review. The monthly salaries of May will be adjusted accordingly, the email says.
According to the revised policy, the company will define key performance parameters and targets.
At the end of every quarter, a score-based performance review will be done. The achievements will be computed every quarter. If an employee resigns during the quarter, no EPB amount will be paid for that quarter.
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“To support employees during the pandemic, the company made a policy exception and paid 100 per cent EPB irrespective of performance. Post-pandemic, the company is reverting to the original policy. This has been communicated to our employees,” an HCLTech spokesperson said in an email response to Business Standard.
The spokesperson added that, “At HCLTech, we have always offered an EPB as part of our compensation package up to the E3 band. The EPB is typically 3-4 per cent of the total compensation, and the average payout is approximately 80 per cent. Our employment contract identifies EPB as performance-linked variable pay, and this is governed by the company policy.”
IT employees’ union Nascent Information Technology Employees Senate (NITES) has called HCLTech’s decision to change the policy “unethical.” The union has raised the matter with the ministry of labour and employment.
“This sudden change in policy has resulted in significant monetary losses for the affected employees, directly contradicting the promises made by HCL Technologies at the time of their employment.
The unilateral alteration of the EPB policy contradicts the promises made by HCL Technologies at the time of their employment,” said Harpreet Singh Saluja, president, of NITES, in a letter to the minister of state for labour and employment.