tcs
TRANSCRIPT
A Report OnA Report On
“TATA Consultancy Services”“TATA Consultancy Services”
Submitted to: Submitted By:
Dr. Brinda Balakrishnan Aniruddh Sharma (83008)
Divya Chaturvedi (83020)
Mukesh Bansal (83033)
Sourav Sagar Mishra (83049)
Vikash Kumar Singh (83056)
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Contents
Chapters Topics Page No.
Chapter 1 Company Profile
1.1.1 Basic Facts 5
1.1.2 About the company 6
1.2 TCS Global 6
1.3. Leadership Team 8
1.3.1 Organizational Structure 8
1.4 Evolution Of TCS 8
1.4.1 Why TCS is a MNC? 9
1.4.2 TCS’s Global Route 9
1.4.3 Organizational Change 9
1.5.1 Impact Of Recession 10
1.5.2 TCS’s Response To The Recession 10
1.6 SWOT Analysis of TCS 11
Chapter 2 Company’s Strategy & Factor Analysis
2.1 TCS Strategy 13
2.1.1 Global Network Delivery Model 13
2.1.2 Strategic Acquisition 13
2.1.3 Integrated Full Services Play 14
2.2 Portor’s Model Analysis 15
2.3.1 CORE Values of TCS 15
2.3.2 Culture @ TCS 17
2.4 Political Environment 18
2.5 Legal Environment 18
2.6 Socio-Cultural Factors of TCS 19
Chapter 3 Resource Management (Country Specific)
3.1 Preamble (USA specific) 22
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3.2 HR @ TCS 22
3.2.1 Staffing Model 24
3.2.2 Recruitment Process 26
3.2.3 Recruitment Objective (Live Case) 28
3.3 Compensation
3.3.1 Compensation Management 30
3.3.2 Compensation Structure 31
3.3.3 Overseas Assignment (USA)
3.3.3.1 TCS – Overseas Deputation Agreement 33
3.3.3.2 Prior to Overseas Assignment 33
3.3.3.3 Other Asistence During Transition 34
3.4 Training & Development 35
3.4.1 TCS Global Learning Centre - Trivendrum 35
3.5 Employee Engagement 36
3.5.1 Performance Appraisal 38
3.5.2 Talent Retention 39
3.6 Community Relations (Outside India) 39
Bibliography
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___________________________________________
Chapter 1
COMPANY PROFILE ___________________________________________
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1.1.1 Basic Facts
• Founded in 1968 by TATA group
• Head Quarter TCS House, Raveline Street, Fort, Mumbai - 400 001, India
• CEO S. RamaDorai
• An MNC having 142 offices in 42 countries across globe
• Total Head Count 1,43,000
Region No. of offices No. of employees
North America 29 14,000
South America 12 5,000
UK 17 4,500
China 04 1300
Australia 03 1000
APAC ex India 24 4000
• Key foreign subsidiaries includes TCS Australia, TCS china, TCS Brazil, TCS
Mexico, TCS USA, TCS UK, TCS Thailand
• Regional offices at South Africa, Canada, Germany, France, Hong Kong, Singapore,
UAE, Uruguay, Chile, Argentina
• Revenue $6.0 Billion
• Home Country India
• Manpower cost 52.12% of revenue (32.90 domestically & 19.22 internationally) in
2009 compared to 51.47% in 2008.
• Listed in NYSE, BSE, NSE
• Total Market capitalization = $ 15 billion
• Revenue = $6 billion
• Employee productivity ratio = $ 6 bn / 1, 43,000 = $ 2.1 mn.
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1.1.2 About the Company
• Tata Consultancy Services Limited (TCS) (BSE: 532540, NSE: TCS) is a software
services and consulting company.
• It is Asia's largest provider of Information Technology and business process
outsourcing services. The company is listed on the National Stock Exchange and
Bombay Stock Exchange of India, London Stock Exchange, New York Stock Exchange
• TCS is part of one of India's largest and oldest conglomerates, the Tata Group, which
has interests in areas such as energy, telecommunications, financial services,
manufacturing, chemicals, engineering, materials, government and healthcare.
1.2 TCS Global
TCS Australia
TCS, with strong domain capabilities on the platform of delivery excellence, provide
near shore, high profile technology services to ANZ customers. In 2006, TCS acquired
consulting firm in Australia, which specializes in business and technology transformation,
establishing its leadership in consulting and solutions space. TCS acquired Sydney based FNS
in 2005 to strengthen its banking solutions portfolio. In order to meet the unique needs of
customers, TCS has also invested in SAS and SAP Technology Centers of Excellence (CoE) to
support its near shore delivery capabilities at Melbourne.
TCS North America
TCS was the first Indian technology firm to set up operations in New York City in 1979.
Today, TCS has 23 offices in U.S., three offices in Canada, three offices in Mexico and more
than 14,000 consultants delivering real business results to customers. There are 4 development
centers and 4 centers of excellence that create winning solutions for American customers.
TCS South America
TCS in South America forms part of the the Latin America business arm of Tata
Consultancy Services, that operates across the Spanish and Portuguese speaking regions of the
world.
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Over 5,500 local consultants provide IT services, business solutions and outsourcing to
over 150 regional and global clients across 14 countries in Mexico, Central America, South
America, Spain and Portugal. TCS operates Global Delivery centers (GDC) in Brazil, Uruguay,
Argentina and Mexico at CMMi Level 5, the highest quality standard for the industry, and
maintains a BPO Center in Chile and Ecuador.
TCS Iberoamerica has expanded operations to 14 countries, accounting for over 4% of
TCS’ worldwide revenues. Its growth in this region is largely Organic, other than the
acquisition of a Chilean BPO firm in 2005.
TCS has created over 5000 direct jobs for local citizens in Latin America, Spain &
Portugal, which has not only helped expand the economies of their countries but also enhanced
the knowledge and competitiveness of their labor forces.
TCS South Africa
One of the first Indian IT services and consulting companies to enter South Africa, TCS
is committed to the development of South Africa. In 2007, TCS South Africa Pty Ltd. was
formed as a subsidiary of TCS Limited, enabling TCS to serve its South African and Sub-
Saharan customers better. We also participate in the incubation of South African IT talent and
help build IT delivery capabilities by training and transferring our globally-competitive IT
processes and methodologies to local firms and citizens with a strong focus on empowerment of
previously disadvantaged people - and to improve our services and the overall experience of our
clients in South Africa.
TCS now counts many leading South African business houses and government organizations
as its clients. These include Nedbank, STRATE, University of the Witwatersrand, Standard
Bank, Barclays and others.
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1.3. Leadership Team
• S. Ramadorai, Chief Executive Officer and Managing Director
• N. Chandrasekaran, Chief Operating Officer and Executive Director
• S. Mahalingam, Chief Financial Officer and Executive Director
• Phiroz A Vandrevala, Executive Director and Head, Global Corporate Affairs
1.3.1 Organizational Structure
At TOP Level
1.4 Evolution of TCS
• Tata Consultancy Services was established in the year 1968. F C Kohli was its first
General Manager.
• One of TCS' first assignments was to provide punch card services to a sister
concern, Tata Steel (then TISCO). It later bagged the country's first software project,
the Inter-Branch Reconciliation System (IBRS) for the Central bank of India
• 1970s, TCS started exporting its services. TCS's first international order came
from Burroughs, one of the first business computer manufacturers.
• In 1981, TCS set up India's first software research and development centre
CEO
CEO
CorporateHead,GlobalAffairs
COO
COO
CFO
RegionalHeads
(APAC,NorthAmerica,Europe)
SBUheads
ChiefMarketingOfficer
ChiefPeopleOfficer
CountryHeads
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Revenue Year No. of Employee
$100 Mn 1991-92 5,500
$1 Bn 2002-03 24,000
$2 Bn 2004-05 47,000
$5 Bn 2007-08 1,10,000
$6 Bn 2008-09 1,43,000
• In 2004, TCS became a publicly listed company.
1.4.1 Why TCS is a MNC?
• 142 offices in 42 countries
• Workforce consists of nationals from more than 60 countries
• It has distribution and delivery centers in most of these 42 countries.
1.4.2 TCS’s Global Route
• In last 5 years, TCS has established several subsidiaries in foreign lands like Thailand,
China, Australia, Brazil , Mexico, Netherlands to cater the need of local customer.
• Also acquired many foreign cos to expand its presence in various locations.
• Hiring More local talent
• It is taking both M & A route and organic growth route to make it big globally.
1.4.3 Organizational change
• In last 5 year, twice TCS has seen rezig in top brass. 1st S. Ramadorai has been appointed to
lead the TCS in 2004. Due to his sharp acumen, he put TCS in growth path. In this period
TCS has evolved from a 2 billion to a 6 bllion dollar co.
• Another significant change that TCS is going to witness is Change in Guard October 2009
where N.chandrasekhran would be replaced as CEO of the company and Current CEO will
be elevated to the post of executive vice-chairman.
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• This change of guard is likely to put TCS into fortune 500 list by 2012-2013 with a revenue
of around $ 11 bn . So, this phase of TCS under new leadership will script a new chapter in
the success story of Indian IT companies.
1.5.1 Impact of Recession
• As we know, the IT and ITES sector has been severely affected by this downturn, TCS is
also not immune to it.
• TCS business is largely export centric and it is into IT service business.
• But, during recession the IT export has fallen significantly as the customer are too
concerned and judicious about their IT spending.
• Finalizing a deal has become a time consuming process which has put TCS into uncertain
business environment.
• As a result, unlike previous years TCS posted a flat growth in the financial year 2008-2009
and the outlook has been the same for next fiscal also.
1.5.2 TCS response to the recession
• This recession has presented a new opportunity for TCS to venture into new geography in
order to reduce its dependence on USA and EU market from where it derives around 80%
of revenue.
• Being hit hardly by global recession, TCS has taken many cost cutting measures in order to
serve customer in a better way in this uncertain economic condition.
• Moreover, it has been acting as a alliance for its clients to help them combat recession by
means of price negotiation.
• TCS has a adopted a flexible approach of shifting the onshore tasks to offshore in order to
offer client a better deal at a low cost.
• To maintain its own operating margins high, TCS has stopped hiring for time being and
largely banking on employee redeployment.
• It has taken several measures to cut its operational cost and to remain competitive in these
difficult times.
• It is also looking for possible target for M & A to achieve inorganic growth and also to
increase its people-process capabilities.
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1.6 SWOT analysis of TCS
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___________________________________________
Chapter 2
COMPANY’S STRATEGY & FACTOR ANALYSIS ___________________________________________
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2.1 TCS Strategy
TCS’s strategy is based on three pillars. These are the
• Global Network Delivery Model
• Strategic Acquisitions
• Integrated Full Services Play
2.1.1 Global Network Delivery Model
The Global Network Delivery Model™ (GNDM™) is a truly global network. GNDM™
is much more than having an India-centric delivery model with near-shore centres and is not
about setting up Offshore Development Centres (ODC) in different geographies. The GNDM™
enables our delivery centres to collaborate on projects, leverage all our assets, work on a
‘follow-the-sun model’ if necessary, and above all, through their homogeneity in terms of
quality, skills as well as look-and-feel, give customers the same experience of certainty,
irrespective of whether they work with us in Chennai, China or Chile. The Company became
the first organization in the world to be certified enterprise wide for ISO 9001-2000, ISO
27001:2005 and ISO 20000:2005 in January 2007. Our customers can continue to experience
the certainty of "high quality of service delivery", as we stay focused on continuous
improvement of security, quality and processes in an industry where technology changes occur
frequently.
2.1.2 Strategic Acquisitions
A key driver for growth has been the Company's strategic acquisitions for creating new
capabilities that would drive higher levels of synergistic growth. The value being generated by
these acquisitions has been significant and so far we have seen only the beginning of synergistic
revenue opportunities. We believe that many of the acquisitions we have made in the last
couple of years have become force multipliers for the Company in terms of both revenue
growth and improved capabilities. Many of the large value deals the Company has been able to
win can be attributed to these acquisitions.
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2.1.3 Integrated Full-Services Play
TCS is increasing its focus on expanding the breadth of its service offerings and
capabilities to become a one-stop service provider. The power of the GNDM™ as well as our
strategic acquisitions is illustrated through our integrated full-services play that now captures
the entire value chain of IT — from consulting to products and solutions and from
implementation to support. One recent example of all our services at work as part of an
Integrated Full-Services Play is the $140m banking/financial services deal from Bank of
Pichincha in Ecuador. This deal uses FNS/BANCS the core banking engine from TCS. This
entire business initiative was consulting led with the objective of bringing about significant
improvement in the cost-income ratio of the bank. In this deal TCS will be offering the bank IT
Services, Infrastructure Services and BPO - all using our GNDM™. The Bank of Pichincha will
depend on TCS's FNS centre in Sydney and India Development centres for any product
customization. It will depend on TCS's Santiago centre for BPO best practices and process
management. Any other custom development will be done at TCS’s centre in Uruguay. TCS's
process capabilities and range of services provide a compelling value proposition for its
existing customers with over 96.8% of our business this year coming from repeat customers.
Moreover, these offerings are also witnessing traction among more than the 100 new customers
added during the year and give the Company significant opportunities to cross-sell different
solutions to customers.
To achieve its target of being among Top 10 IT service providers globally by 2010, TCS
has devised a 5 pronged approach.
• Instead of going for large aquisitations, acquire companies who would be valued around
1/10th of its revenue.
• Target for more multimillion-multi year deal which would ensure constant flow of
revenue in future.
• Diversify and strengthen its geographical presence in places like middle-east, Brazil,
China, Japan and more focus on emerging economies
• Focus on domestic market so that it can contribute around 8% to revenue currently from
2%
• To strengthen its consulting business in order to contribute around 12% to top-line from
current contribution of 5%.
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However, the current downturn has taken a hit on TCS growth plan. So, in recent times,
TCS has tried to reduce it dependence on US market which contributes around 52% of its
revenue and to get more and more business from emerging countries even if at a lower margin.
Thus, it is recently focusing on acquiring more number of new customers from various
geographies.
2.2 Porter’s Model Analysis
In context of TCS, to make it a true MNC, the following 3 factors out of 5 are largely
responsible.
1. Competitive rivalry:- The competition in Indian IT industry has got more intense over
the last decade. WIPRO & Infosys are the two main competitors in this space for TCS
who are competing with TCS in a big way in all aspects. The pressure to remain no.1
software exporter is immense on TCS. So, to maintain its leadership TCS expansion into
new territory is a natural choice for the company.
2. Threat of new entrant:- New service providers like IBM global services,
ACCENTURE, HP, CAP Gemini consulting are expanding very fast in India. So, it is
also putting its pressure on TCS to compete with to maintain growth in long term.
3. Buying power of consumer:- Indian IT service is largely driven by customers. Indian IT
companies have moved form being a simple service provider to a role partner.
Increasing customer centric approach has made the TCS a global player to serve its
customer in a more effective way. As, TCS follows onsite-offshore business model, it is
imperative for a company to set up a local delivery unit for foreign clients. Two major
markets for TCS are USA & EU which contributes around 80% of TCS revenue. In
order to cater to the need of this lucrative market better, TCS has set up a number of
local delivery centers in these geographies.
2.3.1 CORE Values of TCS
• Integrity,
• leading change,
• excellence,
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• respect for the individual,
• fostering an environment of learning and sharing
Besides, TCS business operation is largely driven by TATA code of conduct. Each of TCS
employees irrespective of their nationalities and geographies when 1st join the company go
through a orientation program which aims to imbibe TATA code of conduct in them. Some
important aspects of TATA code of conduct are
National interest
The Tata Group is committed to benefit the economic development of the countries in
which it operates. A Tata company’s management practices and business conduct shall benefit
the country, localities and communities in which it operates, to the extent possible and affordable
and shall be in accordance with the laws of the land. A Tata company in the course of its
business activities shall respect the culture customs and traditions of each country and region in
which it operates.
Equal opportunities employer
A Tata company shall provide equal opportunities to all its employees and all qualified
applicants for employment without regard to their race, caste, religion, color, ancestry, marital
status, gender, sexual orientation, age, nationality, ethnic origin or disability.
Human resource policies shall promote diversity and equality in the workplace, as well
as compliance with all local labour laws, while encouraging the adoption of international best
practices. Employees of a Tata company shall be treated with dignity and in accordance with the
Tata policy of maintaining a work environment free of all forms of harassment, whether
physical, verbal or psychological.
Gifts and donations
A Tata company and its employees shall neither receive nor offer or make directly or
indirectly any illegal payments, remunerations, gifts or comparable benfits that are intended or
perceived to be uncompetitive favor for the conduct of its business.
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Ethical conduct
Every employee of a Tata company including full-time directors and chief-executives
shall exhibit culturally appropriate deportment in the countries they operate in and deal on behalf
of the company with complete professionalism, integrity and honesty. Every employee of a Tata
company shall preserve human rights of every individual and community and shall strive to
honour committements.
2.3.2 Culture
At TCS, one can see an energetic and open workplace environment, and a collaborative
culture that's based on teamwork. Pulling together is a central tenet of its work ethic.
Energetic and full of enthusiasm, TCSers enjoy their day (and night) at work. Life at
TCS is a stimulating and exciting experience. Not only its offices have the best infrastructure
and technology, its associates have a knack of working hard — and partying harder..
TCS employees take pride in adhering to the Tata 'code of conduct', which is in place across
the entire Tata Group. The code is a means of upholding and strengthening the trust reposed
on us by its various stakeholders, be it customers or the wider society.
• Diversity at work: TCS is an equal-opportunity employer and TCSers come from many
nationalities and speak many languages. And, since it believes in celebrating everything
under the sun, TCSers are found singing carols at Christmas and doing
the dandiya dance at Navrathri with equal enthusiasm.
• Open door Policy: The senior colleagues at TCS follow an open-door policy in which
any associate can approach the CEO and senior management with work-related
problems.Communication is a big word at TCS and employees regularly takes part in
webcasts and chat session through which important corporate issues or decisions on
real-time basis are shared with associates worldwide.
TCS has institutionalized open-house sessions and engagement programs in which
associates at all levels meet and discuss various work issues. In addition, TCSers can
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also take part in one-on-one sessions where they can interact privately with senior
management. These sessions are helpful in providing mentorship, as well as
understanding real-life issues that colleagues face at work. The queries and discussions
are formally recorded and followed up.
• Fun @ Workplace: TCSers are habituated to do the regular outing, be it with their
project teams, with Maitree or with just a bunch of other like-minded TCSers. They
often go on treks, nature camps, picnics or just bus rides whenever they get chance.
Many a times such events are facilitated by the company itself.
2.4 Political Environment
Political stability is a huge factor in the growth story of Indian IT sector. As Indian IT
sector is driven by outsourcing, a stable political environment means increased customer
confidence which eventually brings business to the domestic firms.
From the onset Indian govt. has offered tax holidays to IT sector. Further it is extended
till 2012. This kind of favorable action from govt. has helped the companies like TCS to grow
by leaps and bounds. The tax holidays was scheduled to be ended in 2008; but amid on going
global slowdown Indian govt. decided to extend the same till 2012. Thus TCS has been
benefited largely.
However, if political scenario of USA is considered then, it has brought bad news for
TCS. With the change of guard in USA, getting a H1B visa has become more stringent. Earlier,
TCS was one of the main player who has utilized H1B visa in its favor to a great extent to serve
its customers at near shore. Obama’s anti outsourcing policy has compelled USA companies not
to give more business to India which eventually has hit TCS badly.
Thus, to deal with the political environment of host country is a huge upcoming
challenge for TCS.
2.5 Legal Environment
Experience:- In march 2009,Over 100 workers of UK-based insurance firm Legal &
General (L&G) were up in arms against the TCS management alleging that the company is
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replacing them with Indian professionals at lower wages, after India’s biggest software exporter
started executing a five year managed services agreement with the insurer, signed last year.
Such incidents have shown TCS new set of ground realities of running a global
operation. Tech workers in the UK and US very often has launched public outcry against Indian
IT companies and tries to pressurize the foreign cos.
In some countries like UK stringent labor laws are prevalent and deviation from such
can bring a great legal hassle to the companies like TCS which generally works on low-cost
labor model.
2.6 Socio-Cultural Factors & TCS
New geographies attracting IT major TCS are East Europe, Latin America and Brazil,
Russia, India and China (Bric nations) and, as a consequence, posing challenges on account of
multi-cultural environment and language barriers.
In response to such barrier, TCS had to change its travel documents to accommodate
‘partner’ instead of wife. It has also made changes in intranet and common mailing system to
avoid confusion related to tax policies and has included common holidays of different
countries.
Besides cultural practices, hiring rules and transfer of retirement benefits could also
create problems. For example, “Employee management is a crucial factor especially in East
Europe as the law does not insist on a notice period. Employees are free to leave their jobs. So,
TCS prefers to hire natives as HR managers as it needs people who are familiar with rules of
the land and speak the native language.
During the past two years, TCS has been focusing on inorganic growth and is actively
looking at setting up offices in emerging destinations in East Europe and Latin American
countries. TCS has offices in Brazil, China and Hungary.
TCS brings people from these countries to India for special training. TCS aims to
“create a global organisation, which follows the same ethics and values everywhere”.
Hence,Training programmes in India will help expats familiarize with the company’s culture,
which is typically is typically Indian.
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Moreover, in a bid to become a global player in the knowledge sector, TCS is training
all its employees to speak and understand at least one foreign language. The move is not limited
to employees just learning a language but also making them conversant with the culture and
etiquettes of at least one foreign country.
TCS has created a special foreign language learning centre at its Thiruvananthapuram
facility where all newly recruited employees are sent for initial orientation and training before
being inducted into the company. All the new employees are required to undertake a course in
one language of their choice. Moreover, the company has also started running similar
programmes at all its major offices and development centres to impart language and cultural
skills to the existing employees. The company uses several methods (besides classroom and
online learning) such as role plays, games and quizzes to invoke interest in foreign cultures
among the employees.
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___________________________________________
Chapter 3
RESOURCE MANAGEMENT ___________________________________________
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3.1 Preamble (USA-Specific)
TCS was the first Indian technology firm to set up operations in New York City in 1979.
Today, TCS has 23 offices in U.S. and more than 10,000 consultants delivering real business
results to customers. There are 4 development centers and 4 centers of excellence that create
winning solutions for American customers.
USA market is the largest contributor to the TCS’s topline. 52 percent of the TCS
revenue comes from USA alone. Some of the biggest clients of TCS are Citi Group, GE ,
Microsoft which are based in USA. So, to serve the customer better, TCS is striving hard to
increase local base in USA. Earlier a large chunk of employees working in TCS America are
Indian nationals who were going to near shore on work-permit Visas.
However, the changed economic scenario has forced TCS to take a more localized
approach to serve the customers from USA. As a result, TCS opened its largest North America
Delivery Center called TCS Seven Hills Park. Located in Milford, Ohio, a suburb of
Cincinnati, the facility sits on 220 wooded acres in March 2008 with a investment of $19
million. The new facility includes 200,000 square feet of office space and can accommodate up
to 1,000 TCS associates, most of who will be locally hired from the region and its
universities. The facility will serve as the primary software development and delivery center
for North American customers. In addition, the campus will also showcase TCS Innovation
Labs, customer network operations centers and briefing centers.
So, the investment of such measure clearly demonstrates importance of USA in TCS
future plan. Hence, in a nut shell, TCS in America wants to be a long-term player being growth
driver fro its world-wide operation.
3.2 HR @ TCS
TCS has developed an unbreakable bond with sound HR practices in an environment
that defies traditional roles and responsibilities. The TCS-HR group operates with technical
experts to create a synergy which is enviable. Figure 1 illustrates the role of HR, which
evidently is that of a facilitator. So whether it is recruitment or even career development, HR is
the catalyst which initiates and institutionalizes processes. To manage all the functions for over
140000 employees is a Herculean task but the smoothness of operations is intriguing. The HR
structure, which allows flexibility and empowerment, is the solution.
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The major resource for any company is Human. And to management that company
should perform basic function as given below:
• Recruitment Policy and Process
• Training and Development
• Compensation and Salary Structure
• Performance Management
• Talent Retention
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3.2.1 Staffing Model
Country / Business Unit /
Region
Headed By Comments
Mexico Ankur Prakash Indian National
Brazil Cezar Castelli Uruguayan National
Uruguay- Argentina Mario Tucci He is heading 850 professionals
who are based at a Global Delivery
Center and regional training center
in Montevideo (Uruguay), as well as
an extension center in Buenos Aires
(Argentina)
APAC Girija Pande Indian National
Latin America Gabriel Rozman Native to South America
Be-ne-laux Shankar Narayanan Indian National
Australia Varun Kapur His Previous predecessors were Mr.
R Ravishankar (Indian) and Mr.
Rick Marmur (an Australian)
Europe AS Lakshmi Narayanan He was earlier head of TCS UK
Global Hi-tech Business Unit Carol Wilson In the rank of vice-president
Uruguay- Argentina Mario Tucci Locally hired
• TCS staffing model is unique in its way; it is a mixture of both Ethnocentric and
polycentric model. TCS has divided whole of its operation in 5 geographies like India,
North America, Latin America, Europe, APAC, Africa-middle east.
• Other than Latin America operation, all operations are headed by its Home country
nationals. However, Latin America operation is a headed by a 3rd country national. In
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most of the English speaking nations, the country manager is from its home country. Its
Australia operation also during 2006-2008 was headed by a Host Country National
• However all HR positions are taken by host country nationals.
• TCS intends to manage a ratio of (80:20) among local employees and expatriate in its
overseas location. Besides, in emerging economies like china and Japan, Argentina etc.
it is focusing on recruiting local people as to head the operation where it is facing stiff
challenges in terms of customer acquisition due to huge cultural barrier and lack of local
knowledge.
• Currently 30% of the workforce working in TCS Japan is locally hired.
.
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3.2.2 Recruitment Process
(For Entry level position)
• TCS goes for campus placement in various Universities in USA & also holds career fair
at those places.
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• Else lateral hiring is done on demand basis.
Jobs posted on website apply online application screening called upon for
interview May be telephonic or face2face interview or both If found eligible,
job offer verification joining
• In most of the countries where it is operating, TCS has adopted a indirect recruitment
process via its web-site where one can submits his resume. However, it is gradually
starting on-campus recruitment process in places like UK, Australia, USA etc.
• However, TCS looks for those candidates who have excellent academic record
throughout means having at least 65% of mark or equivalent CGPA at all important
level of academic career.
• TCS on campus recruitment policy is meant for hiring resources for both technical as
well as managerial role.
• In TCS, Fresher to lateral employee ratio stands at 60:40. So, it is evident that a large
pool of TCS employee base is fresh graduates. That is why TCS has a robust training
and development program worldwide to leverage the potential of fresh recruits.
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• As at March 31, 2009 women constituted 30% of the Company’s workforce (28% as at
March 31, 2008), however in TCS USA percentage of women workforce stands at
around 35%, marginally higher than the global proportion.
• In last financial year, There were net additions during the year of 1,479 non-Indian
nationals and TCS is focused on adding to its global knowledge workforce and
integrating these professionals into its workforce. Concurrently, a strong talent
localisation initiative was being driven by Ramadorai, as the number of non-Indian
employees rapidly increased to stand at over 10,000 at the end of 2008-09, including
1,200 people in China and over 6,000 people in Latin America, creating a multi-
national, multi-cultural global organisation.
3.2.3 Recruitment Objective (By the help of Live Cases)
Case1
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Analysis :
Technical lead is a mid management job that requires to lead a team of technical expert
and software developers. The main function at this level is to coordinate the activities
performed by the technical team, assessment regarding the quality of work, providing technical
and personal assistance to the team when required, acting as a bridge between the higher
management and his team, motivating the personals in the team etc.
As it is basically a leadership role, attitude is the most important aspect that must be
considered in the selecting a candidate. Also as he/she is also required to carry out complex
technical and administrative works, skill is also an important criterion in the selection process.
Apart from these, the candidate must have area/ domain knowledge to succeed in his role and to
carry out his responsibilities effectively.
So for this designation:
Attitude > Skills > knowledge
Case2
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Analysis
Engineer trainee is an entry level job the where the candidate is raw, fresh and
inexperienced. The company selecting candidates for these positions will basically look for
some basic level of area/domain knowledge relating to software coding and testing so that he
can start doing his basic work and start contributing for the organisation after getting the on job
training. Second most important aspect for this role is good attitude of the candidate. This is
important because as a new entrant in the organisation, he should have the right kind of attitude
to gel with his co workers and work in a team. Lastly, acquiring skills are important as the time
passes and he gains experience s that his contribution increases and he takes up more
responsibility in the organisation.
So, for this role:
Knowledge > Attitude > Skills
3.3 Compensation
3.3.1 Compensation Management
TCS' compensation management system was based on the EVA model. With the
implementation of Economic Value Added (EVA)-based compensation, the salary of
employees comprised of two parts – fixed and variable. The variable part of the salary was
arrived after considering business unit EVA, corporate EVA, and also individual performance
EVA. EVA is calculated as net operating profit after taxes minus a charge of the opportunity
cost of the capital invested. The variable component in the salary structure of an individual also
depends on the rating that he receives on a scale of 1-5 (D-A).
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3.3.2 Compensation Structure
• Median Salary by Job
Employer: Tata Consultancy Services, Ltd.
[Note : Salary of business manager is around $ 0.1 million]
• Median Bonus by Years Experience
Employer: Tata Consultancy Services, Ltd.
• “City allowance”
The compensation package varies slightly depending upon the place of posting. For
example: the person posted at New York is entitled to get around $ 500 per month more
than the person posted in a county like Horsham.
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• Average Vacation Weeks by Benefit/Perk
Employer: Tata Consultancy Services, Ltd.
• Besides, if the employee is unmarried, then he is entitled to get a total 20 days of paid
holiday for his marriage if marriage is conducted at the home country of the employee.
• Else, annually an employee gets 10 days of paid leave for visiting his own country once
a year. During this, the travel expense is reimbursed by TCS whereas the Spouse’s
expenses are burn by the employee himself.
• In a normal year, overseas salary in USA goes up generally by between 3% to 5% where
as it is 10-15% at the parent country.
• Welfare benefits for full-time employees include subsidized Housing and other loans,
medical facilities, retirement benefits, transportation, canteen facilities, overseas
allowances, family events (picnic, treks, cultural events), on premise bank extension
counters/ATMs, Helpdesk facilities, flexible working hours, assistance in school
admissions, holiday homes, magazine subscriptions, overseas travel reimbursement for
paper presentations and maternity leave for adoption.
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• Salary Structure
Typically, a TCS employee gets 70 per cent of salary as fixed component and the rest as
variable & increases towards top management. The latter, in turn, is split into one part
linked to individual performance and the other to company performance. The company-
related variable is paid in advance each quarter.
3.3.3 Overseas Assignment (USA)
3.3.3.1 TCS - Overseas Deputation Agreement
• For the overseas deputation TCS does have a Master Overseas Deputation Agreement /
MODA in short, which every associate going on deputation outside India needs to sign
this.
• There is a clause in the agreement that says one can not accept any offer or anything
from a client / competetitor of TCS, whilst on the deputation. Traditionally INFOSYS,
WIPRO, IBM, ACCENTURE, HP, Cape Gemini, HCL are referred as competetitor of
TCS in the agreement.
• Also one has to serve 6 months after coming back to India in the company.
3.3.3.2 Prior to Overseas Assignment
• The person concerned is given cross-cultural training which includes culture, social
etiquettes, currency usage of host country, language training etc.
• Browse Ultimatix : TCS internal web-portal “Ultimatix” which is a employee interaction
platform also assists as a great tool in order to prepare someone for foreign assignment.
Via “ultimatix” employees share their own experience in a foreign land and also give
necessary things to know before landing in that place. By going through this, one gets an
overall idea about that country. In case of any doubts, the home country employee can
post its queries in “ultimatix” and many TCSers come forward to address the queries put
forward.
• In the event of outbreak of an epidemic or any other local issues which are important , in
India or overseas, Ultimatix is the chosen mode of communication to disseminate
knowledge and dispel myths (e.g. during the SARS and bird flu outbreaks in Asia); email
is also used as a communication medium to send dos and don’ts messages.
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• In ultimatix . there is a section called “ Accomodation” where TCSers make postings
about various “accommodation option” available in their locality or nearby. Thus, his
section also helps a off-shore employee to a great extent to discover his/her possible
accommodation in foreign land.
• Join Maitree : The better half of TCS
o Maitree, a fraternity comprising TCSers’ spouses, was formed with the objective
of bringing the large and geographically widespread TCS community under a
common umbrella.
o Maitree has two distinct objectives. Primarily, it serves as an information-
sharing body where useful tidbits about living in a foreign country Questions
like Which are the good schools in Minneapolis? Where do you get Indian spices
in Stockholm? are shared by TCS employees and their families.
o Maitree also functions as a forum where a wide range of socially relevant
activities are conducted, be it improving the environment or taking care of the
less privileged.
• The Visa initiation process is done by the company and TCS bears all the expenses
during this process of obtaining the VISA. If the person concerned is married, the
initiates the process of getting the “Dependent VISA” for the spouse of the person
concerned.
3.3.3.3 Other Assistance provided by TCS during this Transition
• TCS bears all the expenses related to traveling from source to destination for both the
employee and his spouse which includes medical insurance, Travel insurance etc.
• If some employee goes for an overseas assignment to USA from India for a long term (
> 6 months) , then the employee is paid the salary of 1 month in advance.
• TCS travel dept. of the local unit also helps the employees to locate a suitable
accommodation nearby.
• TCS provides assistance to the employee to obtain a Driving License Locally & extends
monetary help to the employee to acquire a vehicle for commutation.
[NOTE: The above monetary contribution varies depending upon the rank of the employee]
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3.4 Training and Development
As organisations continue to operate in and compete in a Dynamic global scenario
where unpredictability is the norm, Winning organisations need to convert today’s challenges
into Tomorrow’s opportunities. It is this belief that fuels TCS’ Commitment to invest in
building people competencies and ensure human capital development on an unparalleled scale.
In the year under review, TCS continued to invest in recruitment, Learning and development of
its people despite short-term Business pressures. The Company integrated over 48,000
Professionals, including over 22,000 campus graduates and Over 12,500 professionals were in
sourced as a result of the Acquisition of Citigroup’s captive BPO in India. TCS remains the
largest private employer in Indian industry with over 143,000 World-class professionals and
with the highest retention. Over 1.6 million learning days have been invested in developing
Additional competencies in 2008-09. Around 23,000 TCSers gained additional technology
Certifications. TCS believes that creating talent readiness will Drive agility in learning and
development. Our Initial Learning Programme (ILP) curriculum has been revised in this context
to Train fresher’s across multiple technologies and platforms TCS also continues to expand its
web-based learning platform to Benefit its diverse workforce of over 10,000 professionals from
67 nationalities. New e-learning modules have been launched In Portuguese, Mandarin and
Spanish to help employees in Latin America and China to develop their own competencies. A
New Integration portal has been launched. This is designed to Familiarise and educate people
on the Tata Group’s values, ethos and culture, especially for colleagues who have come into the
Company, through in sourcing from customers and through Acquisitions. Employee
performance is closely aligned to Organisational performance. TCS has raised the individual
Performance bar in the current environment to improve Employee efficiency and productivity.
This requires employees to contribute more aggressively and enhance performance Levels on a
continuous basis.
TCS spends around 6% of its revenue in training and developement
3.4.1 Learning and Development – Trivandrum
TCS recognises that investing in its people is a key to the sustainability of its delivery
model by generating employee satisfaction and minimising the attrition rate. One aspect of this
is the culture of learning throughout an employee’s development lifecycle and TCS invests
around 6% of its profits in L&D. The L&D centre, at Trivandrum, India, was established in
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1998 to deliver its training requirements. It has18 classrooms, a library, an auditorium, a
conference hall, discussion rooms, and about 300 personal computers connected to servers.
All full-time employees of TCS, including all support groups, receive half-yearly career
development reviews. All new employees, in the first year of their employment, receive
quarterly reviews. At the end of every assignment, employees may also receive formal project-
end reviews.
3.5 Employee Engagement
Employee inputs are solicited through the annual survey called PULSE, conducted
through the Company’s digital portal, Ultimatix. Opinion polls, Proactive Employee
Engagement Programme (PEEP), open-house sessions, Process Improvement Proposals (PIPs),
grievance mechanisms, and exit interviews are some other mechanisms to solicit feedback from
employees. Cross-Functional Teams (CFTs) of local Admin, HR and employees are deployed
for seeking the feedback. To ensure appropriate client site work environment, our work contract
provides a baseline, and HR regularly liaisons with client support groups. Some channels of
Employee Engagement in TCS are:
Speak Up: Speak Up is a platform for employees to discuss pertinent matters with the
Company’s seniors and to bring themselves closer to the Company and its management;
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thus developing the channels of communication between employees and the Company’s
top executives.
Grievance Redressal System: Employee grievances are logged through a centralised
grievance redressal system. Branch Grievance Coordinators and the Corporate Grievance
Process Lead perform weekly and monthly reviews to ensure quality grievance resolution
by the Human Resources Team within the specified timeframe. Ethics Counsellors at
regional and corporate levels also play a key role in handling the sensitive grievances.
PIPs: Employees can log PIPs through a link in Ultimatix. To encourage employee
participation in the endeavour, the ‘Best PIP’ award is given annually.
PEEP – Mentoring: PEEP is a mentoring initiative in which employees connect one-on-
one with TCS’s senior management.
Propel: Propel provides a forum to discuss issues and ideas, to promote the ideas and to
resolve issues at inception level itself. Propel covers all employees across TCS. Camps
and confluences are conducted for problem solving, discovery of new ideas, dialogue,
reflection and fun. Through these sessions, the employees are provided a platform for
learning, interacting and problem solving.
PULSE: PULSE is the company's annual Associate Satisfaction Survey, undertaken
every year to measure and understand the TCS Associate's attitude, opinions, motivation,
aspirations and satisfaction. Through PULSE, TCS attempts to find out opportunities for
improvement, invite suggestions, ascertain shortcomings, design appropriate plans, which
finally conclude in action. The steady rise in the Associate Satisfaction Index (through
PULSE) is an indication of TCS culture and care for its associates.
Stress Management: The IT industry is known for its high-pressure work atmosphere and
long working hours, which create high levels of stress. TCS encourages its employees to
de-stress by participating in Fun@Work which is a term used across TCS to refer to any
activity or programs that is conducted during work. Fun@Work Committees are formed
across accounts which organise, picnics, parties and get-togethers with fun and games.
Annual picnics take place in each region that gives TCSers spread across a region to come
together and celebrate with their families and colleagues.
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3.5.1 Performance Appraisal
TCS conducts appraisals twice a year.
• At the end of the year
• At the end of a project.
Appraisals are based on Balanced Scorecard, which tracks the achievement of employees
on the basis of targets at four levels:
financial
customer
internal
learning
The financial perspective quantifies the employee’s contribution in terms of revenue
growth, cost reduction, improved asset utilization and so on; The customer perspective looks
at the differentiating value proposition offered by the employee; The internal perspective
refers to the employee’s contribution in creating and sustaining value; The learning and
growth are self-explanatory. The weight given to each attribute is based on the function the
employee performs. Based on their individual achievements, employees are rated on a
scale of one to five (five = “superstar”). If employees get a low rating (less than two) in two
consecutive appraisals, the warning flags go up. “If the poor performer continues getting low
scores then the exit option may be considered”.
Over the years TCS has found the pattern that leads to the maximum decline in
performance — boredom. If employees work for more than two years on the same project,
typically either their performance dips or they leave the organization. To avoid that, TCS
shuffles its employees between projects every 18 months or so. “Performance drops if
motivation drops”. Employee utilization rate in TCS is about 76% that is highest in the
industry.
At the heart of an employee's satisfaction lies the fact that his performance is being
appreciated and recognized. TCS's performance management system has metamorphosed into
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one that emphasizes objectivity and a system that mandates performance evaluation against pre-
determined criteria.
What deserves special mention is the active participation of the senior management in the
determination of guidelines for the performance appraisal process.
The process ensure buy in of the employees since the guidelines for the rating system and
its conversion into money terms is not unilaterally decided by HR but is a consensus of a cross
functional team with representation from all levels.
3.5.2Talent retention:
The attrition rate of 11.4% in fiscal 2009 (previous year 12.6%) is the lowest in the
industry. This low attrition rate has been achieved by continuously investing in learning and
development programs for employees, competitive compensation, creating a compelling work
environment, empowering employees at all levels as well as a well structured reward and
recognition mechanism.
3.6 Community Relations (Outside India)
• TCS continues to carry forward its corporate sustainability in USA; The American
cancer society has commended TCS for its active participation in fund-raising walks in
Minneapolis, Detroit & support of its Hope lodge initiatives for cancer survivors.
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• TCS has committed a grant of $ 75,00 for creating educational opportunities for children
in Appalachian counties of Ohio.
• In UK, TCS regularly partners on social causes along with some of its clients in fund-
raising. TCS supports the Stepney football club in East London for less privileged
youth. TCS has trained them in social skill and business skill besides organizing a
football training tour to Kolkata and Jamshedpur.
• In china, TCS has been active with the HOOPE school project in Beijing which ahs
more than 200 students from less privileged families.
• TCS Uruguay has supported the ‘Endeavour’ program since 2005 which is a training
program to groom local entrepreneurs from all over the latin America.
• TCS has continued its support of the UN world food program’s walk of life across
Europe; as also the Down Syndrome Association in Singapore and Australia.
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BIBLIOGRAPHY
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