Wipro aligns top executives' incentives to company performance

Equal weightage to both company performance and business unit or individual; change kicks in from April 1, 2016

Wipro, India’s third largest IT services company, has tweaked the incentive structure for its top executives, wherein 50 per cent of the weightage will be given to the performance of the company while determining the incentives as compared to a particular business unit or account. The other 50 per cent of the weightage would be given to Individual performance and performance of the team.

The changes has been made effective April 1 this year. The new changes, apart from boosting the team spirit that is crucial for the overall company performance, also give some level of variability in the top level compensation.

According to Sourabh Govil, president and chief human resources officer of Wipro, the idea behind these changes is to bring in a greater amount of team spirit that is very much required for the team’s performance. "The central idea behind this shift is that not only do we want individuals and their teams to win, but their victories should contribute to the success of the organization,” Govil was quoted in a media report.

The new structure would applicable to the CEO, his direct reportees as well as a level below them across verticals and horizontals, he added in the report.

According to industry experts, this is also expected to give some level of variability in the compensation structure of top executives, which could be helpful at uncertain times when the demand environment continues to be patchy.

In most of the top tier IT services companies, almost 50 per cent of the compensation offered to top employees are variable component. However, it ranges between 10-30 per cent for junior to middle-level employees.