Tata Consultancy Services (TCS), India’s top software exporter has announced that fresh recruits will not be eligible for variable pay during their training period of six months.

According to the decision, around 1500 fresher, who have the joining by the end of the September, will not get the variable pay of Rs 5000 per month till they complete their training of six months.

At present, TCS offers an annual salary package of Rs 3.2 lakh to its employees. The salary package includes a variable pay of Rs 60,000 i. e. Rs 5000 per month. The new trainees will not get this variable pay package for the first six months.

Ajoy Mukherjee, Vice President and Head of Global Human Resources of TCS, has said that the compensation re-structuring is primarily from a productivity point of view. While this will result in cost savings, it is more of a mindset change.

Mukherji has declared that during training time, freshers don’t work on any client projects and hence they don’t have any contributions in earnings of company. Therefore, freshers are not eligible for any variable pay.

The decision will allow company to save around Rs 75 crore per year. TCS has recruited about 25,000 freshers from campuses in 2008 who are expected to get joining by the end of the year.

Mukherjee also said that there will not be any increment this year, whereas, about 9000 employees will be promoted to higher levels.