HCLTech revises performance bonus policy to pre-pandemic version

HCLTech Principal Information Technology Services has revised its Human Resources Compensation and Compensation Policy to convert the “Participation Performance Bonus (EPB)” component to variable pay from the current 100 percent fixed bonus paid to all employees.

According to an internal email from the company, management notified employees of the updated policy, which went into effect on April 23. According to the new policy, employees who are on the bench will not be eligible to receive a performance bonus, which could reduce their monthly salary.

Employees will now be paid EPB based on a quarterly assessment from managers instead of the monthly payment of a prepaid bonus.

The Company has completed the calculation of bonus EPB for the month of May based on the results of its performance review. The email says monthly salaries for May will be adjusted accordingly.

In accordance with the revised policy, the company will set key performance standards and targets.

At the end of each quarter, a performance review will be conducted based on the results. Achievements will be calculated every three months. If the employee resigns during a quarter, no EPB will be paid for that quarter.

“To support employees during the pandemic, the company has made an exception to the policy and pays 100% of the EPB regardless of performance. After the pandemic, the company reverts to the original policy. This has been communicated to our employees,” a spokesperson for HCLTech said in an email response to Business Standard.

The spokesperson added: “At HCLTech, we have always offered EPB as part of our bonus package up until the E3 range. Severance pay is typically 3-4 per cent of total compensation, and the average compensation is around 80 per cent.” The employment contract specifies We have EPB as performance-linked variable pay, and that is subject to company policy.”

The NITES Senate IT Employees Union called HCLTech’s decision to change the policy “immoral.” The union raised the issue with the Ministry of Labor and Employment.

“This sudden change in policy resulted in significant financial losses for the affected employees, which is in direct contradiction to the promises made by HCL Technologies at the time of their employment.