EVA and Compensation Management System at Tata Consultancy Services

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : HROB075 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges


Case Length : 14 Pages
Period : 1998-2005
Pub. Date : 2005
Teaching Note : Not Available
Organization : Tata Consultancy Services
Industry : Information Technology
Countries : -


The case examines the compensation management system at TCS based on the EVA model. With the implementation of EVA based compensation, the salary of employees comprised of two parts - fixed and variable.

The variable part of the salary was arrived after considering Corporate EVA, Business unit EVA and also individual performance EVA. The new system was implemented successfully and it helped the company identify the non-performers.

The company also benefited a great deal in retaining talent. However, it also received criticism from several quarters for 'putting golden handcuffs on excellent performers.'


Study the compensation management system at TCS

Analyze EVA as a performance measurement tool


  Page No.
Introduction 1
Background Note 2
The HR Policies 3
The EVA Model 5
EVA-Linked Compensation System 7
The Benefits 8
The Drawbacks 9
Exhibits 11


Tata Consultancy Services, Compensation Management, EVA, HR Policies, Fixed Pay, Variable Pay, Recruitment, Incentives, Employee Satisfaction, Employee Stock Options, Best IT Employer in India, Attrition in IT Industry, Performance Improvement Plan, Balanced Scorecard

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