Satyam to bring in revenue-linked allowances

Press Trust Of India
Satyam Computer Services will scrap the variable pay policy and introduce a revenue-linked allowance for a section of associates from next month to minimise cost.

In an e-mail to employees, Satyam CEO AS Murty said: “A revenue-linked allowance is being introduced from April 1, 2009. This will only apply to associates working in approved ‘billable’ roles and those who are allocated billable customer projects.” Billable projects are the one where the man-hour is billed according to specified milestones. Murty said the variable compensation policy would be withdrawn from April 1 for all associates across Satyam.

In the e-mail, Murty said the company is focusing on two critical issues — rebuilding the organisation and optimising costs. “It is very important to balance income and expenses, and we have to pay close attention to this issue,” he added.

For the third quarter ended December 31, 2008, and the fourth quarter which ends on March 31, 2009, only the minimum guaranteed amount (25 per cent) of the variable pay would be paid to all associates.

The variable pay varies between 10 per cent and 30 per cent of (an) individual’s total package offshore and between 5 per cent and 15 per cent onsite.

The Central Bureau of Investigation, probing the scam, today filed a petition with an additional chief metropolitan magistrate seeking one week's custody of Satyam’s former chairman, B Ramalinga Raju, and four others.

However, of the variable component 25 per cent is guaranteed pay and the rest is performance-oriented.

“These are demanding and difficult times which require hard decisions and unavoidable measures. Maintaining a healthy balance between achieving aggressive goals, retaining talent, and lowering expenses, is key,” Murty said.