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Deciphering unstated of Employee wellbeing in people practices

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Asterisk mark has a unique significance in any written text – usually appearing to be an innocent footnote or comment to add or clarify the context of the core narrative. Yet the innocuous appearing litter star * of typography, sometimes appearing as a single little star, many times in conjunction with few equal peers, can smilingly hide range of deceptive intents and tones. Generously used in marketing and advertising campaigns, the disproportionately small print or fine print signifies ‘terms and conditions apply’ or simply ‘conditions apply’ and alerts buyer to be the more watchful.

In 4.5 million people strong Indian IT/ITES industry – without much space for collective bargaining and democratic channels for employees’ voice, ‘asterisk’ has been a potent one-sided tool in the hands of employers. In absence of requisite openness, cryptic policies in people processes of IT companies affect employees’ faith in organizational practices. Most of the times, employees remain grappling to figure out even most basic information about the critical issues affecting their work sphere. It includes issues relating to career growth, promotion, performance evaluation, competency development, training nomination and individual performance, to name a few. To take an example, even when companies have structured employee compensation with a variable component linked to individual and business unit related performance, there is hardly any practice to transparently share the specific basis to determine individual’s performance incentive. Put simply, a narrative of more assumptions on the top of asterisks makes it more than curious.

Financial jugglery hitting employee earning can never be an employee friendly measure

In pandemic impacted landscape, while PR machinery of IT companies continued filling unusual stories of employers’ generosity and employee engagement, asterisk made its silent entry in the annual compensation letters of the employees almost around the same time. Besides, unilateral mark-up of variable pay ratio, payment terms for performance bonus – earlier being paid on quarterly basis and now changed to be paid annually in many IT companies, is one such measly example. That too is subject to an add-on condition that an employee remains on the company rolls on date of announcement of such performance bonus.

Even if the hypocritical intent behind such stingy practice of employers is ignored, the question emerges as what is the real quantum and financial advantage for IT companies and does it anyway factor the cost of aggravated trust deficit. Based on back of envelope calculation, the changed annual payment terms of performance bonus (assuming 15% of CTC) alone deprives an average employee having CTC of INR 1.0 million almost INR 4500 per year in interest. Employees relying on quarterly payment of performance bonus for fulfilling their prior financial commitments must seek for other financing sources at a market based interest rate. On the other hand, direct saving in salary funding cost to be callously pocketed by the employers is estimated 30 basis points (0.3%) to 60 basis points (0.6%) of the total wage bill, depending on performance bonus ratio of 10% to 20%. Even if fifty percent of industry employees getting affected with this financial machination, annual figure would exceed an amount of INR 1000 crore.

In addition to the above, an industry afflicted with a high attrition rate, if someone ventures to make a job change any time before the announcement of performance bonus by the employer, amount of pro-rata of accrued performance bonus of an average employee remorselessly subsumed by the company is estimated to be in ranges of INR 12.5K to 150K.  If we extrapolate the figure for the industry afflicted with an attrition rate of 15%, IT companies expect to corner an unjust bounty of INR 4700 crore per annum or almost 1% of the total wage bill of the industry from forfeiture of performance bonus. Amid hype and hoopla generated on social media platforms and sponsored HR awards, all these financial jugglery at the expense of the employees certainly cannot be an employee friendly gesture.

Outdated maxim of ‘My way or highway’ must change

Dichotomy in talk and practice becomes more than obvious with uncaring mindset of employers’ fixated with outdated maxim of ‘you take it or leave it’. While work conditions can be fully dependent as per business requirements of the firm, does the employer has the carte blanche of unilaterally changing the salary and wages terms – more so, without any deliberation or consultation with the employees. If increasing employee attrition rate results into additional the hiring costs for the companies, they must find better ways to fund it – rather than unilaterally slicing employee’s salary. Changing the structure and method of annual wage payment terms by adding few asterisks in compensation letter once again highlights the insensitive one-sided approach of the employers.

From employers’ perspective, principle of Caveat emptor (Let the buyer beware in context of sale of goods) aptly saves the situation. After observing the change in wages and payment terms, if employees continue to remain silent and do not raise their legitimate voice, it is their fallacy alone. Openly negating the idea of collective bargaining, employers hardly care if any forum for democratic representation of employees’ voice or has been enabled for healthy work relations all these years. Per published materials, other than TCS indicating its 0.03% of its workforce in India (roughly translating to ~100 employees), existence of any organized work council or employee association in other top IT companies is not observed. 

Democratic representation of employees’ voice and Labour Reforms

The industry as a whole cautiously avoids the topic of employees’ representation and collective bargaining agreements at the public forums as if it is never a real issue for industry’s sustenance and growth. IT Companies take inflated pride in being part of knowledge economy to substantially distinguish from traditional firms. Also, the industry attributes much of its success for absence of regulatory supervision and low governmental interference on key business affairs – including employee matters. At the same time, very absence of any structural representation of employees’ voice or collective bargaining arrangements in work affairs creates a less trusting and low-empowered work environment.

In some of representations on recently legislated Labour Codes, the industry has maintained its old stance for seeking relaxations from labour regulations and reforms (covering working hours & overtime, wages, leave policy, social security, disputes and other work conditions). It is quite paradoxical that the industry wants IT companies to continue playing a primitive role of early industrial age- framer of rules on work matters, executioner/administrator as an employer and also the adjudicator, all rolled into one.

With organizational recourse intentionally or unintentionally unavailable to employees for resolution of their legitimate demands or grievances, an equitable and impartial forum can help negotiate the middle path, thus nurturing a healthy work environment for employees and also organizational productivity. Amid emerging gig economy and new working models, close-ended one-sided surveys and blatant PR-driven agenda of employee friendliness are certainly passé. Precondition for infusing long term business sustainability and trusting work environment rest on rightful vesting of employees’ proportionate say in organizational affairs with well-functioning workers’ forum and open dialogues on all employee-centric issues.


Disclaimer: The author is an employee of Tata Consultancy Services Limited (TCS). The opinions expressed herein are of author’s own and do not reflect those of the company.