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Talent Management at Tata Consultancy Services

Lakhwinder Singh Kang and Harpreet Sidhu Global Business Review 2011 12: 459 DOI: 10.1177/097215091101200308 The online version of this article can be found at: http://gbr.sagepub.com/content/12/3/459

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Global Business Review 12(3) 459471 2011 IMI SAGE Publications Los Angeles, London, New Delhi, Singapore, Washington DC DOI: 10.1177/097215091101200308 http://gbr.sagepub.com

Talent Management at Tata Consultancy Services

Lakhwinder Singh Kang Harpreet Sidhu

Abstract Tata Consultancy Services (TCS), established in the year 1968, is the largest provider of information technology (IT) and business process outsourcing (BPO) services in India. TCS retained its leadership position in the Indian IT industry with total income of ` 219,477.6 million and net profit of ` 46,962.1 million for the year ended 31 March 2009. TCS is an equal-opportunity employer and TCSers come from many nationalities and speak many languages. In February 2009, TCS changed its hiring strategy and started focusing on just-in-time hiring or real-time talent management. To build a quality talent pool, TCS started a programme called Academic Interface Programme (AIP). Also, various kinds of training programmes were conducted at TCS: Learning and Development, Initial Learning Programmme, Continuous Learning Programme, Leadership Development Programme, Foreign Language Initiative, Workplace Learning and Ignite. Compensation management system at TCS is based on the economic value added (EVA) model. TCS conducts appraisal of its regular employees twice in a year, and also at the end of the project in case of employees hired specifically for various projects. In order to identify its outstanding talent, TCS has been recognizing the contribution of its people in many ways. Keywords Talent management, recruitment, training, compensation, EVA

Tata Consultancy Services (TCS), established in the year 1968, is a software service and consulting company, headquartered in Mumbai, India. F.C. Kohli was the first general manager and J.R.D. Tata was the first chairman, followed by Nani Palkhivala. It began as the Tata Computer Centre, a division of the Tata Group whose main business was to provide computer services to other group companies, and soon after, the company was named as TCS. Tata Group is one of the largest conglomerates and most respected groups of Asia, which has interests in areas such as energy, telecommunications, financial services, manufacturing, chemicals, engineering, materials, government and health care. TCS is the largest provider of information technology (IT) and business process outsourcing (BPO) services in Asia. It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services. In the early 1970s, TCS started exporting its services. TCSs first international order came from Burroughs, one of the first computer manufacturers. It was assigned to write
Lakhwinder Singh Kang is Reader at the Department of Commerce and Business Management, Guru Nanak Dev University, Amritsar, Punjab, India. E-mail: lakwinder_gndu@yahoo.com Harpreet Sidhu is Project Associate at the Department of Commerce and Business Management, Guru Nanak Dev University, Amritsar, Punjab, India. E-mail: harpreet.sidhu15@ymail.com India Quarterly, 66, 2 (2010): 133149

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Lakhwinder Singh Kang and Harpreet Sidhu

code for Burroughs machines for several United States (US)-based clients. This experience also helped TCS bag its first onsite project: the Institutional Group & Information Company (IGIC), a data centre for ten banks, which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its computer systems.1 In 1979, TCS opened an office in New York, the first overseas office by an Indian software firm, and in the 1980s, TCS remained the largest Indian software services firm. In 1980, the Indian software industry exports were $4 million, shared by 21 firms, of which TCS and a sister firm, Tata InfoTech, accounted for 63 per cent (Aggarwal et al., 2009). In 1981, TCS set up Indias first software research and development centre, the Tata Research Development and Design Center (TRDDC). In 1989, TCS delivered an electronic depository and trading system called SECOM for Sega Inter Settle (SIS), Switzerland. It was by far the most complex project undertaken by an Indian IT company.2 The early 1990s saw a tremendous surge in TCSs business. In early and mid-1990s, TCS reinvented itself to become a software products company. TCS BaNCSCore Banking Solution, Tax MantraIntegrated Tax Solution, TCS File Authentication Solution, TCS e-Learning Effectiveness Measurement Solution, TCS Business Rules Engine, Med MantraTCS Hospital Management and Information System, etc., were among many software products produced by TCS. In fiscal year 2009, TCS generated 96.29 per cent revenue from IT and consulting services, whereas sale of equipment and software services generated only 3.71 per cent of the revenue. In the late 1990s, to accelerate its revenue growth, TCS decided to employ a three-pronged strategy: developing new products with high revenue-earning potential; tapping domestic and other fast-growing markets; and focusing on inorganic growth through mergers and acquisitions. The company also capitalized on new revenue opportunities such as Y2K and Euro conversion that emerged in 1998. In 1999, TCS entered outsourcing, e-commerce and related solutions by setting up a 10-member e-business division.3 By 2004, e-business contributed half a billion dollars to TCS. On 9 August 2004, TCS became a publicly listed company and it was listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) of India. In 2008, TCS was involved in a variety of industries, including telecom, government, insurance, manufacturing, high tech, banking and financial services. It offered product life cycle management and systems integration to its customers. The list of various clients of TCS is given in the Table 1. The company offered e-business application, development and maintenance, architecture and technology consulting, engineering, security, infrastructure development and management and quality consulting services. In addition, TCS offered software packages for electronic banking, insurance billing, customer relationship management and hospital management. It catered to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical and energy and utility industries. TCS acquired various companies like CMC Limited, Airline Financial Support Services India (AFS), Aviation Software Development Consultancy India (ASDC), Swedish Indian IT Resources AB (SITAR), Phoenix Global Solutions, Pearl Group, FNS, Tata Infotech, Camicorn and Citi Global Services Limited.4 TCS retained its leadership position in Indian IT industry with total income of ` 219,477.6 million and net profit of ` 46,962.1 million for the year ended 31 March 2009. As a listed company, TCS has, over the last five years, recorded a compound annual growth rate (CAGR) of 23.33 per cent. The detailed information about the various financial measures is provided in Table 2. TCS operated extensively in the global market with global footprint extended to over 42 countries through its 140 offices globally. North America, the biggest market for TCS, crossed the $3 billion revenue milestone and grew by 26 per cent Global Business Review, 12, 3 (2011): 459471

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Talent Management at Tata Consultancy Services

Table 1. Various Clients of TCS

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ABB, ABN AMRO, Agilent Technologies, AGL, Avis Group, AVIVA, Bahrain National Insurance, Boots UK Airways, BT Wholesale, Chrysler, Cisco, Electric Arts, Ferrari Scuderia, ING Group, Motorola, Microsoft, National Insurance Company, National Grid, NXP Semi Conductors, Philips Semi Conductors, Prudential, Roche Pharmaceuticals, Sanyo, Logistics Corporation, Sony, United Utilities, Woolworths, Australia.
Source: http://www.tcs.com/about/corp_facts/clients/Pages/default.aspx

Table 2. Information about TCS 200405 Headcount Nationalities Employees added through recruitment Non-Indian nationals Women Attrition rate Total revenues (` million) Profit after Tax (PAT) (` million) Earnings per share (EPS) (`) Net current assets (` million) Net worth (` million) Sales (` million) Market capitalization (` million) Revenue by geographic segments America (%) Europe (%) India (%) Others (%) 45,715 35 10,000 1,600 21.6% 8% 97,484.7 19,769.0 20.20 17,970.9 33,210.5 80,511.1 687,863.3 59.20 23.08 12.1 85.54 200506 200607 200708 111,407 62 22,116 10,138 28% 12.6% 226,195.2 50,260.2 51.36 55,533.2 109,048.6 182,926.8 793,546.7 54.79 29.19 9.04 6.98 200809 143,761 67 19,216 10,500 30% 11.4% 278,128.8 52,564.2 53.63 75,434.5 133,463.0 224,060.8 528,444.0 56.09 29.53 7.85 6.53 66,480 89,419 53 21,140 22,750 4,321 8,584 24% 26% 9.9% 11.3% 132,639.9 186,852.1 29,667.4 42,126.3 30.32 43.05 28,671.8 43,311.1 56,093.3 80,589.9 112,360.1 149,420.9 936,593.6 1,204,852.3 59.04 22.43 12.49 6.04 56.27 28.47 9.00 6.26

Source: Annual reports of TCS from FY2005 to FY2009; Capitaline database; Aggarwal et al. (2009).

in 200809 despite the recession in the region, while Europe grew by 38.5 per cent and markets like Asia-Pacific, Latin America, Middle East and Africa grew at a rate of 16 per cent during the same period. The global economic slowdown in general, and the difficulties that the key global markets and the customers of TCS faced during this period in particular, required TCS to help customers meet their loss reduction goals while enhancing the value.5

Talent Management
Sustainable competitive advantage comes through investing in people to build organizational capabilities. Solving the talent paradox is not an impossible task but it requires an integrated strategic approach to talent management, from planning and sourcing to training, development and retention. TCS has put in place processes, policies and systems that have matured and that could deal with a huge workforce employed by it.

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Diverse Workforce
For Indian companies, managing a diverse workforce is no longer a choice but an imperative. TCS is an equal-opportunity employer and TCSers come from many nationalities and speak many languages. TCS has the culture of celebrating everything under the sun, singing carols at Christmas and doing the dandiya dance (a famous dance of the state of Gujarat, India) at Navrathri with equal enthusiasm. The company intends to build a workforce with over seven and a half per cent representation of foreign nationals. The company has adopted the diversified workforce approach in order to create a comfortable environment for clients and employees who work in it on specific projects (Punnoose, 2010). The company is investing and optimizing its global presence, and in order to pursue opportunities in global markets on an ongoing basis, it has established 140 offices in 42 countries as well as 101 solution centres in 18 countries. As on 31 March 2009, TCS had 23 offices in the United States (US) and Canada; 11 offices in seven countries in Ibero-America (Spanish or Portuguese-speaking countries); nine offices in the United Kingdom (UK) and Ireland; 22 offices in 12 countries in Europe; 18 offices in 12 countries in the Asia Pacific region; and seven offices in six countries in the Middle East and Africa. In India, TCS had 56 offices at 13 different locations. The composition of the global workforce shows increasing trends in the number of female employees and foreign nationals from countries across the globe. As on 31 March 2009, women constituted 30 per cent as compared to 28 per cent on 31 March 2008. The company has been employing persons from 67 nationalities. There were net additions of 1,479 non-Indian nationals during fiscal year 2009. Region-wise information about the workforce employed by TCS is shown in the Table 3. Table 4 shows the contribution of various continents to the companys consolidated revenues during fiscal year 2009.6

Recruitment
TCS is the largest IT employer in India and has been able to maintain attrition rate at its lowest of 11.4 per cent in the industry (TCS Annual Report 200809, p. 25).7 Details about the number of its employees over the years is given in Table 5. In February 2009, TCS changed its hiring strategy and started
Table 3. Region-wise Details of Workforce Country Chilean Ecuadorian Brazilian Chinese Mexican American British Uruguayan Hungarian Colombian Others
Source: Annual report of TCS FY2009.

Composition of Global Workforce (Percentage of Total Workforce) 15.0 13.2 10.8 9.6 9.6 8.5 8.3 6.2 4.9 2.2 11.7

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Talent Management at Tata Consultancy Services

Table 4. Region-wise Revenue Figures Overseas Office India US Ibero-America UK Asia Pacific (APAC) Europe Middle East and Africa (MEA)
Source: Annual report of TCS FY2009.

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Revenue (%) 7.85 51.38 4.71 18.99 4.75 10.53 1.79

Table 5. Number of Employees, Year Wise Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 No. of Employees 2,300 2,600 4,761 6,450 5,589 6,071 7,864 9,929 11,176 12,770 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 No. of Employees 15,044 17,607 20,459 24,168 30,000 45,715 66,480 89,419 111,407 143,761

Source: Annual reports of TCS from FY2005 to FY2009; Capitaline database; Aggarwal et al. (2009).

focusing on just-in-time hiring or real-time talent management. TCS decided to adopt the policy of realtime management whereby we would hire in the last three months of the final year of graduation rather than a year before, (Shinde, 2009) said S. Ramadorai, ex-managing director (MD) and chief executive officer (CEO). This would not only help the company to optimize and increase its utilization but also align its hiring strategy closer to the demand and supply of business, a company spokesperson said. TCS froze lateral hiring and planned to hire only on need basis. The decision was based on our constant interaction with the academia, which had been telling that students were not pursuing higher studies as they got jobs and also during the academic year they tend to get lax, (Shinde, 2009) added the companys spokesperson. The decision would not impact the companys current hiring plan of recruiting over 24,000 students for FY10. This step came immediately after the NASSCOM announcement to hire students only in their eighth semester. Some firms were hiring in the fourth or fifth semester of an academic year. However, now the IT trade body and companies have decided to hire only in the eighth semester of the academic year, (Shinde, 2009) said NASSCOM President, Som Mittal. It was felt that this would help the students as well as the industry (Shinde, 2009).

Academic Interface Programme (AIP)

To build a quality talent pool, TCS started a programme called Academic Interface Programme (AIP). Continuous interaction with educational institutions remained a central plank of the companys strategy Global Business Review, 12, 3 (2011): 459471

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to attract the best scientific and engineering talent and engage in cutting-edge research and development in partnership with universities. TCS associated itself with 499 academic institutes in India, and 85 overseas, during 200809. It organized 390 technical workshops for about 52,000 students, and also arranged 131 faculty development programmes for about 4,000 college teachers and provided internship opportunity to about 1,300 students. Seventy two students, including 61 from India, were awarded the TCS Best Student Project awards to recognize and reward academic excellence. TCS also has ongoing research alliance with 13 universities, which includes eight overseas universities and five from India.8

Groom Researchers
In order to enhance the faculty talent pool, TCS announced a new programme to encourage quality academic research in the country. According to a report on the companys website (http://www.tata.com/ media/reports/inside.aspx?artid=1qsx37vT2CM, accessed 28 November 2009), TCS would fund 200 doctoral candidates over a period of five years to take up PhD programme in reputed academic institutions across the country. The TCS research fellows would pursue original research in various aspects of computer science. Approximately, 40 candidates would be chosen every year from reputed academic institutes as TCS research scholars, said CEO, N. Chandrasekaran. The induction of 200 new PhD scholars into the academic eco-system over a period of five years would significantly enhance the pipeline of high quality faculty for colleges, apart from generating new ideas and honing research talent in the country, added Ajoy Mukherjee, Vice President and Head, Global Human Resources.9

Training
TCS is known for its human resources practices in India as well as globally. The company has laid emphasis on the overall development of its employees. TCS has enabled its employees to meet their career objectives through rotation across projects, functions and locations globally, and has also offered multilingual capability training modules. It has helped employees in building new skills and competencies, which has promoted knowledge sharing and team building.10 TCS was considered as one of the real aces when it came to training and learning. It spent 2 per cent of its revenue every year on training of new entrants, to build competency capital within the company in cutting-edge technologies, domain and functional areas (SiliconIndia 2009). Over 1.6 million learning days were invested in developing competencies during 200809, and about 22,500 TCSers gained additional technology certifications and over 1,400 high potential individuals were being trained for future leadership roles in the company.11 In 1997, it set up a state-of-the-art training centre, Technopark, at Thiruvananthapuram which offered training to new recruits and TCS staffers at various levels. Technopark provided the employees with three kinds of training programmes focussing on technology, attitudes and management. TCS also had a Manpower Allocation Task Committee (MATC) which determined the career path for employees (Divetia and Thadamalla, 2007).

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Talent Management at Tata Consultancy Services Various kinds of training programmes were conducted at TCS:

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Learning and Development (L&D): Special emphasis was placed on providing necessary learning interventions to associates with potential of being leaders in the company. Assessment centres were also being used, and several levels of learning was provided in TCS. Each of the levels was unique, aimed at varying objectives. The proactivity of the company came to light, with the inclusion of newer modules as per the requirement. Initial Learning Programme (ILP): TCSs ILP was designed to provide a smooth transition from campus to corporate environment and to transform graduate engineers into IT consultants with global mindset. The participants were put through a rigorous 47-day programme that had a good mix of technical skills and soft skills (Punnoose, 2010). The ILP has now spread to different parts of the country, namely, Ahmedabad, Guwahati, Bhubaneswar, Hyderabad and Coimbatore, in addition to one in Thiruvananthapuram.12 Continuous Learning Programme (CLP): This was a manifestation of the companys commitment to the continuous growth of associates, which was in line with the companys core values of learning and sharing. The programmes under the CLP umbrella arose out of business strategies, project needs, technology and business directions and individual aspirations, and spanned across technologies, domains, processes and soft skills. This laid emphasis on long-term, short-term and mediumterm needs of the organization alike (Punnoose, 2010). Employees of TCS gained 23,000 new technology certifications during 200809 as part of the CLP.13 Leadership Development Programme (LDP): The programme was to churn out the future leaders for the company. Associates were carefully assessed for leadership potential and then put through rigorous branded programmes. TCS also encouraged associates to attend various programmes at premier business schools across the globe. Foreign Language Initiative (FLI): Foreign Language Initiative was to help the associates to communicate effectively with the customers from other countries. Under this initiative, associates were encouraged to learn one or more foreign languages. This initiative also helped associates to use English effectively for business communication. This was highly beneficial in a company with a diverse workforce. The cross-cultural issues were curtailed with the proper use of communication. Workplace Learning: Apart from all these initiatives, TCS encouraged workplace learning. TCS subscribed e-learning courses and online books to facilitate associates to learn while at work. The classroom sessions and e-learning materials complemented each other (Punnoose, 2010).

Ignite: A New Wave in Talent Transformation14

Historically, TCS recruited engineers to meet its business needs. To increase its scalability, the company realized that it has to be much more diverse in terms of its intellectual, social and cultural dimensions. TCS followed a scientific approach to measure and pilot new initiatives in talent management. To build the companys talent portfolio, it conceived Ignite, a small experiment in the larger context of human resource (HR). Believing in the premise that Indias talent shortage was an opportunity and not a crisis, Ignite was a strategic initiative that re-imagined and re-engineered the entire talent value chain. Ignite

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offered an accelerated learning programme to individuals from non-engineering backgrounds. It was launched in December 2006 by hiring, training and deploying two batches of trainees with 1,100 recruits in total. The success of the programme could be judged by the fact that more than half had competing offers from other companies but chose to join TCS through it. Its goal was to make fresh recruits productive the moment they joined the company. It was specially designed to build a strong foundation in software through a customized curriculum which consisted of not only IT-intensive structure but also focused on soft skills, logic and problem-solving methods, customer orientation and project management. It promoted blended learning through a mix of broadcast sessions, intensive laboratory work and workshops. One component of the training was dedicated to customer project-specific training, during which trainees learned customer-centric skills as per the project requirements. As such, their training revolved around learning-by-doing. All trainees undertook complex case studies with TCS expecting real-world levels of productivity. Recruits must have produced 500 lines of code, which were checked for functionality, authenticity and elegance using both automated tools and manual review. Critical feedback highlighted the importance of professional responsibility. A personal growth monitor allowed trainees to keep track of their own growth. They could compete both against themselves and with their colleagues using a daily index known as Mindex, which enabled measurement and performance-driven metrics. All of this was supported with human interaction and faculty feedback. Ignites innovation had revolved around four main areas: 1. Hiring: Despite the perceived talent shortage, TCS strongly believed that talent was not the preserve of any particular social group. The question was how to develop new, cost-effective ways of talent spotting. The company decided to broaden its talent pool, recruiting from science colleges in addition to its usual base of engineering schools. Working with colleges, alumni and other networks, it developed a Smart Form with built-in metrics to identify individuals with an aptitude for programming suitable for a global IT workforce. Typically, out of every 100 applicants, only between 510 were hired. However, all applicants were requested to complete an e-mail survey to maintain the quality of the hiring process. 2. Transitioning: Successful applicants demonstrated both an aptitude for programming and a positive attitude. They had to wait for eight months before joining the company after being hired, during which Ignites on-boarding process kicked in to reduce the time taken by recruits to become productive once they start work. TCS discovered that families were important stakeholders for many employees as about 60 per cent of trainees were women from small towns, and parents were key decision makers in the employer-selection process. Ignite used social networking technologies to include families in the on-boarding process, and parents were invited to visit the training facility in person. 3. Transformation: Since trainees were 1920 year old men and women, they would have to learn adapt from their past college lifestyle to the present corporate culture. Most didnt have a computer science background; usually, they had studied mathematics, physics or chemistry, and many had never touched a computer. Ignites training transformed them from science students into software professionals while teaching them to work in large teams. Recruits were also presented with ample opportunities to demonstrate leadership even as rookie software programmers. 4. Learning spaces: Ignite took place in an energizing, purpose-built learning environment. TCS paid close attention to the architecture of the learning space as the design has encouraged informal Global Business Review, 12, 3 (2011): 459471

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learning, peer-to-peer learning and learning-by-doing (in a nine-hour workday, three to four hours are devoted to lectures), as well as e-learning. Four months were spent in this learning space, with another three months spent learning on the job as part of trainees project training. Since the inception of the Ignite programme, the total number of graduates trained and deployed in TCS until 2009 was 2,517.

Compensation
Compensation management system at TCS was based on the economic value added (EVA) model. The salary of an employee comprised two parts: fixed and variable. The variable part of the salary was arrived at after considering business unit EVA, corporate EVA and also, individual performance EVA.15 The EVA system calculates profits after considering all costs, including that of capital. If the revenues were in excess of the costs, including operating expenses, costs of developing and investing in the people, products and business, then value had been created. A comprehensive EVA-based incentive compensation plan was designed for the employees. TCS was also implementing the bonus bank at the individual level. This exercise began with a target bonus being earmarked for allocation on corporate target realization, with a built-in multiplication factor for exceeding the targeted EVA. When the corporate target was exceeded, a potential bonus was declared. This accrued to the bonus bank of the individual as two components: Component A, the result of the share in the corporate pie; and Component B, a composite factor depending on the business unit and individual performance. The accruals were cumulated over the years and the pay out each year was decided as a portion of this cumulative balance, leaving a surplus in the bonus bank. This concept of bonus bank allowed an unlimited multi-year decision horizon, replacing the traditional thresholds and caps. It demanded sustainable performance improvements, and maintained the important cumulative relationship between pay and performance (Punnoose, 2010). Typically, a TCS employee got 70 per cent of salary as fixed component and the rest as variable. The latter, in turn, was split into a part linked to individual performance and the other to company performance.16

Performance Appraisal
A poor performer was not always a poor performer for life, says S. Padmanabhan, Executive Vice President, Global Human Resources (see Jimmy, 2009). A spokesperson said:
TCS has an institutionalised process of bi-annual employee appraisal system that ranks employees on a grade between 1 and 5. If an employee gets a grade of 2 or less during one appraisal cycle, he or she is put on a performance improvement plan that includes additional training as well as assignments on new projects. If at the end of the second appraisal cycle, the employee does not come up to the mark and his or her ratings do not improve beyond 2, then TCS, after proper counseling, disengages with them. (Corporate Bureau, 2008)

TCSs performance appraisal system was supported by an online system called the Human Resource Management System, an Oracle Developer 2000-based tool. The system included complete information, Global Business Review, 12, 3 (2011): 459471

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starting from biographical details of employee to his projects performance. Right from his entry, an employee in TCS got formal performance feedback once every two months till such time that he was confirmed, after which the performance feedback was provided twice every year on a formal basis. However, TCS widely encouraged an informal feedback discussion between project leaders and team members on regular basis. Appraisals at TCS were based on Balanced Scorecard, which tracked the achievement of employees on the basis of targets at four levels, for instance, financial perspective, customer perspective, internal perspective and learning and growth perspective (Jimmey 2009).17 As a part of performance appraisal, 550 employees in 2007, 500 employees in February 2008 and 1,300 employees on 12 March 2009 were asked to resign. It was not a part of any cost-cutting exercise designed to cope with the economic slowdown, said a spokesperson of the company. Rather, TCS biannual performance appraisal throws up underperformers who were given special training but if they were not up to the mark in the next appraisal, they were asked to leave.18 TCS also reduced the size of its UK workforce to 4,500 people by pulling back sales and administrative staff from delivery centres and customer offices in the UK to fill other posts in India (Health, 2009). TCS took such steps not only for the sake of cost cutting but due to deceleration blues, as TCS decelerated from growing at the rate of 3035 per cent per annum to 1015 per cent per annum (Mohan, 2009).

Employee Recognition19
In order to identify its outstanding talent, TCS has been recognizing the contribution of its people in the following ways: 1. Nomination to coveted training programmesto encourage self-development. 2. Best project awardto promote a spirit of internal competition across work groups and to foster teamwork. 3. Best pride in performance (PIP) awardto encourage innovation and continuous improvement. 4. Best auditor awardto acknowledge participation in critical support roles. 5. Spot awardsto ensure real-time recognition of employees. 6. Recommendations for new technology assignments/key positionsto ensure career progression and development of employees full potential. 7. Performance-based annual incrementsto recognize high performers. 8. Early confirmations for new employeesto reward high-performing new employees. 9. Long-service awardsto build organizational loyalty. 10. EVA-based incrementsto ensure performance-based salaries. 11. On-the-spot recognitionto guarantee immediate recognition of good performance. 12. Project milestone partiesto encourage efficient execution of projects.

Employee Costs and Employee Productivity20

Employee costs include salaries which have fixed and variable components, contribution to provident fund, superannuation fund, gratuity fund and the employee insurance schemes. It also includes expenses Global Business Review, 12, 3 (2011): 459471

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incurred on staff welfare. Total employee cost has been reported in the annual reports of the company which includes employee cost and overseas business expenses. The total employee costs for the financial year 2009 was ` 144,738.6 million as compared to ` 114,110.4 million in financial year 2008, which means 26.84 per cent increase as compared to previous year. The total employee costs as a percentage of revenues was 52.04 per cent in the financial year 2009 as compared to 50.45 per cent in the financial year 2008. This increase of 1.59 per cent in costs as a percentage of revenues was attributed to various factors like: increase in number of employees; inflated compensation package, particularly in India; effect of exchange variation for foreign currency allowances paid to employees deployed at various overseas locations; and increased contributions to retirement funds. Recruitment and training costs were ` 1,209.9 million in 2009 as compared to ` 1,730.3 million in 2008. Recruitment and training costs as a percentage of revenues were 0.44 per cent in 2009 as compared to 0.76 per cent in 2008. The details about total employee costs are reported in Table 6. If we look at growth figures from 2005 to 2009, the number of employees has grown at the rate of 32.42 per cent and total employee cost at the rate of 32.75 per cent. Profit after tax has grown at the rate of 28.19 per cent and sales have also grown at 28.85 per cent, but profit after tax per employee has come down at the rate of 3.21 per cent and same is the case with sales which has slowed down by 2.69 per cent.
Table 6. Employee Costs (Rupees in Million) 2005 Employee Costs Overseas Business Expense (Employee allowances paid overseas) Total Employee Costs Recruitment and Training Costs 22,828.3 24,255.6 47,083.9 423.9 2006 47,202.4 16,239.0 63,441.4 789.6 2007 80,028.5 9,985.4 90,013.9 1,448.0 2008 78,546.0 35,564.4 114,110.4 1,730.3 2009 99,015.8 45,722.8 144,738.6 1,209.9

Source: Annual reports of TCS from FY2005 to FY2009; Capitaline database.

Conclusion
The philosophies of leadership, delivery excellence and the promise of Experience Certainty are pillars on which the success of TCS is cemented (TCS Annual Report 200809, p. 14). This is perhaps, best reflected in the fact that TCS, a $6 billion company, has achieved its vision of being counted amongst the top 10 IT service companies in the world today. The immense talent, professionalism, dedication and support of TCSers continues to be the companys greatest asset. Looking towards the future, company will remain focused on agility, innovation and operational excellence.21 Mr N. Chandrasekaran, ex-CEO and MD said:
TCS has grown multi-fold in the last ve years. It has successfully put in place a robust Talent Management process to identify talent, mentor and create an effective succession planning. Today, we need to take talent management to the next level. We need to consistently have a highly motivated and empowered workforce. That is the key to delivery excellence, the ability to get people to realize their true potential and bring out the best in them. (Chandrasekaran, 2009)

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Lakhwinder Singh Kang and Harpreet Sidhu

As on 31 March 2009, TCS has 56 offices at 13 different locations in India and 140 offices in 42 countries, as well as 101 solution centres in 18 countries. As reported in Table 3 and Table 4, in 200809, the US contributed 56 per cent of revenue of the company and Europe contributed more than 29 per cent, whereas India contributed only 7.85 per cent of the revenue of the company. In order to cater to these markets, more than 92 per cent of the total workforce employed was Indian and only around 7 per cent were non-Indians from 67 nationalities, thus, recruiting and training the Indian employees to meet the needs of its diverse customer base has not been a simple task. Also, with the recovery of the market, TCS would like to develop new products and services and enter new markets to broaden its customer base. It would be a challenge for TCS to meet its employee requirements, integrating diverse workforce, developing required competencies, managing employee attrition and bringing employee costs down. Notes
1. Tata Consultancy Services. Wikipedia, the Free Encyclopedia. Retrieved from http://en.wikipedia.org/wiki/ Tata_Consultancy_Services (Accessed on 20 November 2009); Tata Consultancy Services. Retrieved from http://www.provigator.com/tata-consultancy-services-tcs (Accessed on 20 November 2009) 2. Tata Consultancy Services. Wikipedia, the Free Encyclopedia. Retrieved from http://en.wikipedia.org/wiki/ Tata_Consultancy_Services (Accessed on 20 November 2009) 3. Tata Consultancy Services (BOM: 532540). Wikinvest. Retrieved from http://www.wikinvest.com/stock/Tata_ Consultancy_Services_(BOM: 532540) (Accessed on 20 April 2010); Retrieved from http://www.tcs.com/ offerings/Pages/default.aspx (Accessed on 15 January 2010); Annual report of TCS FY2009. 4. Tata Consultancy Services. Wikipedia, the Free Encyclopedia. Retrieved from http://en.wikipedia.org/wiki/ Tata_Consultancy_Services; Tata Consultancy Services (BOM: 532540). Wikinvest. Retrieved from http://www. wikinvest.com/stock/Tata_Consultancy_Services_(BOM:532540) 5. Annual report of TCS FY2009. 6. Annual report of TCS FY2009; Ibero-America. Wikipedia, the Free Encyclopedia. Retrieved from http:// en.wikipedia.org/wiki/Ibero-America (Accessed on 2 January 2011) 7. Annual report of TCS FY2009. 8. Annual report of TCS FY2009. 9. TCS to create 25k jobs next fiscal. Retrieved from http://www.tata.com/media/reports/inside.aspx?artid=1qsx 37vT2CM (Accessed on 21 January 2010) 10. Retrieved from http://ibef.org/download/TCS_23oct.pdf (Accessed on 21 January 2010) 11. Retrieved from http://www.bseindia.com/xml-data/corpfiling/announcement/Tata_Consultancy_Services_ Ltd1_200409.pdf (Accessed on 21 January 2010) 12. Retrieved from http://elearning.tvm.tcs.co.in/ (Accessed on 14 February 2010) 13. Annual report of TCS FY2009. 14. Annual report of TCS FY2009; Kathuria (2008); TCS to scale up Ignite program. Moneycontrol.com. Retrieved from http://www.moneycontrol.com/news/business/tcs-to-scaleignite-program_299461.html (Accessed on 16 February 2010) 15. Compensation management at Tata Consultancy Services Ltd. (2008). Coping with turbulent times in the Indian IT industry. ICMR: IBS Center for Management Research. 16. Salary cutting in ITs. Rainbow Skill. Retrieved from http://www.rainbowskill.com/business/salary-cutting-inits.php (Accessed on 15 February 2010) 17. Five hundred TCS employees quit post appraisal. The Financial Express. Retrieved from http://www.financial express.com/news/500-tcs-employees-quit-postappraisal/269635/

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18. TCS asks 1300 employees to leave. Business Line. Retrieved from http://www.blonnet.com/2009/03/13/ stories/2009031351250400.htm (Accessed on 18 January 2010) 19. See Jimmey (2009). 20. Annual report of TCS FY2009; Annual report of TCS FY2008. 21. Annual report of TCS FY2009.

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