Let me share with you the empowerment & growth, to say the EVA story at Tata Consultancy Services which has proved to be self propelling growth model for the employees at TCS which might go a step further to add to our knowledge lingo also in providing the growth path for our employees in our organizations too.

Tata Consultancy Services (TCS) employs over 15000 professionals, has offices in 23 countries and projects in 50 countries across the world, and revenues around $700 million. Among its clientele are number of Fortune 500 companies and it is in the league of 30 top IT consulting firms in the world. TCS today is an Indian enterprise with a global reach its hiring and people care practices are in line with the industry practices and the compensation model has been traditional. The company has now set its sights on becoming a truly global organisation. Its vision is to be among the top 10 IT consulting organisations in the world, a global employer of choice. It is looking towards institutionalising leading edge practices in hiring, training, and people care, with and innovative EVA - based compensation model. The target model will be one that offers a high growth, high performance internal environment to empowered, proactive, high-brand consultants operating in a dynamic external environment.

In giving shape to the EVA model, an organisation needs to keep its focus towards the ultimate goal of aligning its people to the corporate mission, creating an entrepreneurial culture through an empowered work force, and building ownership with accountability. TCS worked out a EVA framework to align corporate value with the performance of the constituent business units and the individuals who comprised these. It translated to a compensation model, where the employee had a share in the corporate pie with add-ons from the profits of the Business Unit and the Individual Performance Factor. At the individual level, an employee needs to know the drivers to tweak to enhance the EVA of the company, of the business unit, and his own contribution towards all these. There are three basic drivers - revenue, cost, and capital charge. Revenue is driven by the r ate or license price put into the product, sales, billable hours, response time, and domain skills. On time delivery obviously has an impact on revenue because better delivery cycles improve the turnaround to the customers. Cost is managed through productivity, is affected by sales and marketing costs, recruitment and others. Receivables and training are the bulk of the capital charge. These are a representative list, and there are many others.

The individual works towards the improvement of the benefit package, which essentially has three components - the Corporate EVA, the Business Unit EVA, and the Individual Performance Factor. Out of the total EVA payment a certain percentage goes to each employee on the basis of corporate EVA improvement. Secondly, if your business unit did better than another business unit, then automatically you got more than the other business unit. Again it is a team reward concept. The third one depends on the evaluation of individual performance - excerpts from a featured article by the EVP of TCS.

Regards,

Harish M