REWARD SYSTEM IN TCS

TCS gave utmost importance to its human resource function. The company believed in the premise that "good ideas can come from any level of the organization and teams can do better than the individuals." TCS have adopted EVA reward system. In 1996, TCS was organized into a three dimensional model with the first dimension comprising of industry practices, which included engineering, transportation and telecom; the second dimension comprising of service practices like e-business, outsourcing, technology consulting; while global and regional operating areas formed the third dimension. A business unit could be a part of a service, a practice, a geographical unit or a combination of all the three. Every unit was considered to be a revenue center and had its own EVA target. The units that did not fall under the purview of any of these were corporate offices and research & development, the costs of which were divided among all the units. Through EVA-linked compensation, employees could claim stakes at three EVA levels - at the organization level, at the business unit and the individual level. The individual was informed how he or she could contribute to the EVA enhancement at all three levels. EVA was controlled by revenues, capital and costs, and an individual could contribute in any or all of these areas at all the three levels. The benefits of EVA were realized across all levels in the organization. Employees became aware of their responsibilities and their share in increasing the EVA of the unit and organization. All the units could determine how they had fared against the targets. EVA was not just a performance metric but an integrated management process aimed at achieving long term goals. One of the major benefits of implementing EVA in TCS was increased transparency in the organization. The internal communication within a unit had increased considerably. The decision making process became more decentralized. In 2003, TCS caused an uproar in the IT industry when it reduced the variable salaries of employees by 10%. This was the initial impact of EVA which was implemented in the company from April 01, 2003. The reduction in the variable salary resulted in an overall reduction of monthly take-home salary for most of its employees.

REWARD SYSTEM IN MICROSOFT

MICROSOFT is one of the wealthiest and most successful companies in the world. Even more important, from a human resource perspective, is the fact that Microsoft is an employee-driven organization. While other organizations base their success on better manufacturing techniques, or better technology, Microsofts success is based on the effectiveness of their employees. Essentially, Microsoft value their staff and realize the importance of their staff. This focus on employees may, in the future, expand to all organizations. Microsoft then, is worth studying as an example of best practice in human resource. Firstly, the study will present information on the human resource practices at Microsoft. Secondly, the study will analyze these practices with a view to showing why they are effective. Microsoft retained the same basic principles as they expanded but had to change their methods when the number of new employees required could no longer be sourced only from universities. The recruiting practices continued to be active rather than passive, with Microsoft head hunting the best staff. These staff were found, monitored and recruited from other companies by over 300 recruiting experts, once someone had been identified as hard core - Microsofts euphemism for the kind of highly talented and driven people they sought - the pursuit was relentless, if subtle. Regular telephone calls at discreet intervals, conversations at industry conventions, invitations to formal dinners - recruiting team members employed every means possible to keep the lines of communication open Microsoft also took advantage of breaking opportunities such as company layoffs, one example is with the AOL down size, when we heard AOL was downsizing Netscapes operations in the valley, we assembled a team to identify the best talent and go knocking on doors Microsoft attempted to cater to the needs of its employees from the beginning. Recognizing that the majority of employees were just out of college, the Microsoft Company operated like a campus. The former director of human resources describes this saying, How do you make young kids who had never been away from home - or only as far as college - comfortable? We wanted to keep the atmosphere at work one they were somewhat familiar with, and also make sure it gave them a sense of social belonging

Critical to this is the link between individual performance and reward, with semiannual performance reviews linked to pay increases, bonus awards and stock options. Performance goals employees were measured against were specific measurable ones, these performance objectives shortened to SMART: Specific, Measurable, Attainable, Results-based, and Time-bound. This formal review system also included more common evaluations by managers to ensure no unexpected deviations. The system also included the process of employees evaluating themselves, these self-evaluations then being sent to the manager who does their own evaluation. The employee and manager then meet to discuss the review