Infosys- Strategic Human Resource Management

SUBMITTED BY: GROUP 4 ROLI BANSAL PRAPTI MATHUR HUMA RIZVI DIVYA K NAIR PRIYANKA GROVER SHANLINI VERMA

INTRODUCTION
On Nov 13,2003 after a strategy meeting with chairman and CEO the HR leadership

team left the conference room with a mixture of excitement and apprehension.
By 2007 cofounders wanted INFOSYS on the top ten list of best performer & best

employer. From march 1993 to 2003 Infosys had growth rate of 65% and revenues increased to US $754 million. First Indian company to grant stock option to its employees
Ranked number one in Business Today Best Employer Survey in 2001 and 2002 In 2003 INFOSYS toppled from Best Employer List in the same Business Today

survey. Internal employee satisfaction survey showed dissatisfaction among employees.

HR Leadership needed answers to prevent crisis like this from recurring.

BIRTH OF INFOSYS
Narayan Murthy was born on 20th Aug,1946.

After Graduation he took job in Paris.

After completing his work in Paris he came back to India in the year 1974. He spent two and half years in public sector then four years in start up software firm. In 1981, he and his 6 colleagues founded their own venture- INFOSYS. Started INFOSYS with 250$ borrowed from spouses.

The Early Years of Infosys 1981-1991: The Vision

of the professional, by the professional and for the professional as opposed to kinds

of firms that have dominated the Indian Corporate Landscape.

In words of Nandan Nilekhani, youngest cofounder and current CEO of Infosys, they wanted to build a company that was professionally owned and professionally managed, with good corporate governance, good employee management, and good ethics. We wanted a firm that promised a fair deal to all its stakeholders- shareholders, employees and customers alike.

The Hard Reality and Near Death

Hard Reality :

Intensely bureaucratic and regulated environment of 1980s.

Restrictions placed by Indian Government on opening sales offices outside India in 1986. In 1989 restrictions on the number of B1 Visa placed by US Government every year affecting Infosyss ability to send its employees to customer locations in U.S.

At this point the company almost DISSOLVED..!! It was as good as Dead..!!

One of the Co founders left and their was a debate among rest on the best course of action to take with consensus being drawn towards selling the company or dissolving it.

Keeping Hope Alive

Narayana Murthy who had been quiet throughout the discussion now spoke up. He said

he was confident that the company was going to succeed and he was happy to buy out any of the others who wanted to leave.
All other co-founders decided to stay and Murthy admonished Let this be the last time

we talk about selling the company.

Economic Liberalization
Although the founders decided to stay , they recognized the need for drastic change in

strategy.
This internal impetus was boosted by external booster, Liberalization of Indian

Economy.
In 1991 faced with economic meltdown due to high inflation, low foreign reserves,

BOP crisis, etc, government launched a program of economic liberalization that dismantled the License and permit Raj and significantly opened the economy.
The software companies benefited the most. Infosys tapped the Indian Capital Market

for its IPO.

The Move from Body-Shopping to Off Shoring STRATEGY SHIFT

Infosys shifted from its initial strategy Offshoring to Body-Shopping firstly.

But motivated by its near death experience Infosys Re-examined its Strategy by refocusing its work from onsite Body Shopping to Offshoring thus converting a Threat into Opportunity. Infosys became more quality and process focused in its approach to software development.

Infosys 2000-2004
Moving up the it value chain

infosys has moved towards providing higher-end value added services including it strategy and it design. infosys provides a greater proportion of lower end services but spans more geographies with its global delivery model. infosys is trying to get into consulting and end-to-end solutions.
Improving brand equity

infosys was taking a number of steps to improve its brand equity. it became the first Indian company to list on nasdaq (on March11, 99) by providing differentiating services than its competitors.

People Philosophy
From the time Infosys was founded in 1981 ,the founders had always tried to ensure that the firm was the best Employer or Employer of choice for potential employees. During the Era of Liberalization in 1991 (competition from multinationals)

Infosys ensured that the salaries of their employees were in the top 10%-15% of salaries offered by its competitors. Infosys began issuing stock opinion warrants, which vested over a period of five years to its employees. Infosys invested a substantial part in relocating to its 80-acre campus at Bangalore consisting of extensive dinning ,residential,entertainment,ample green space and areas of recreation.

People Philosophy
According and HR Manager in Infosys:There are three ways in which Infosys had added value to the employee:1. 2. 3. Learning value-add through training. Emotional value-add through the work environment. Financial value add through compensation and benefits.

The Challenge of Developing the Infoscion

The efforts made by the organization :

Open door policy(Grievance Resolution Mechanism) Emergency support Health platform(Health Assessment & Lifestyle Enrichment-HALE) Life beyond work

Employee discontent was on rise Disparity of expectations across employee hierarchy was complex.

Troubling factors with the companys growing size :

Employees deprived of technical and creative ingenuity

Organization becoming more impersonal

To manage employee discontent

Created a college like environment Events like DJ nights ,quizzes, intellectual debates & dances Employee Social Services Group

Customer

Delight

Fairness

CLIFE
Pursuit of Excellence

Leadership By Example

Integrity & Transparency

 HR executive says:

We want everyone to be Value Champions

C- LIFE became a challenge Extensive and detailed induction process

Freshers Professionals

The disparity and diversity of the employee hierarchy was becoming more apparent.
Employee turnover was increasing which led to an increase in employee costs.

Execution Challenges

Difficulty in executing work efficiently Not able to meet client expectations Standardized output to clients Employee frustration and increasing costs

Reduction in the number of visas issued by the U.S. government

Preparing Infosys for future growth: changes after 2000

Infosys was on its way to be a small large company . For that it recognized the

business imperative to institutionalize and improve the productivity, cost competitiveness, efficiency.
For achieving all these Infosys brought a series of changes into the

organization.

Building a portfolio of core companies and services. Reorienting the way people were measured, compensated, promoted and rewarded

 Managing portfolio diversity

Infosys was evolving into a multinational firm with a portfolio of core companies. Challenge : several subsidiaries had different cultural and compensation disparities. Variable pay Variable pay in organization was introduced in the organization with three components: Company performance Unit performance Individual performance Idea behind: aligning Infoscionss with Infosyss interest. If Infosys is performing better , the Infoscions will be equally rewarded. Similarly during the downturn, the pain is also mutually shared. Helped Infosys to compete with other multinational companies which offered higher packages in attaining a quality talent pool. Challenge: received a mixed reaction from employees.

Broad banding
Undertook an elaborate competency modeling for each roles within organizational structure and collapsed 15 layers into 7 bands. The rational for moving towards role based organization was twofold. * Employees can analyze the current role and identify the expected role and identifying the gaps, and the skills the employee needs to attain to move to the desired role.
* Broadband let us create an equitable framework for people related decision making. * Attached numerical worth to the roles * Easy to compare jobs *Facilitated career planning.

Challenge: Employee discontent and dissatisfaction. : Rapid changes in policy : Fostered miscommunication and rumors : Distrust among employees

Promotion policy
Earlier promotion policy was based on: individual performance and seniority Now, Infosys linked its promotion policy based on three factors: Individual performance, individuals abilities to fulfill the next role. Existence or need of any particular need of the organization. the rational behind new policy was two fold.

The promotion was based on performance not seniority.

There should not be any fat between the organizational layers.

FALL FROM GRACE

After being highly ranked on Best employers list in 2001 and 2002, Infosys

wasnt on the list in 2003.

The companys internal surveys indicated that the employees were dissatisfied.

Rapid Retrenchment on Employee Satisfaction

The Management team found the root of the problems in the changes made

from 2001-2003.
These changes de-emphasized small company feel and collegiate atmosphere

where policies and processes could be suited to personal needs.

Employees were alienated due to introduction of new policies like variable pay

policy, etc. which seemed to benefit the company but not them.

Issues
Employee turnover Increasing disparity and diversity in the employee

hierarchy
Discontent among the employees Broad banding(Collapsed 15 layers into 7 bands) Rapid changing HR policies

Possible Solution
Know from the horses mouth. Open forum discussions Exit interviews

No metrics to identify the cause for turnover

Provide career development opportunities. Move from Off shoring to Body Shopping

THANK YOU