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Human Resource Management Practices in
Infosys
INTRODUCTION
"Our assets walk out of the door each evening. We have to make sure
that they come back the next morning."
(Narayana Murthy, CEO Infosys).
Infosys technology, a leading software company based in India, was voted as the best
employer in the country in many HR surveys in the recent years. The company is well
known for its employee friendly HR practices. Though Infosys has grown to become a US
$ 2 billion company by the year 2006, it has still retained the culture of a small company.
Infosys attracts the best talent from across the country and recruits candidates by
conducting one of the toughest selection process. Infosys was one of the first companies to
offer ESOPs to its employees. The company followed variable compensation structure
where the employees compensation depended on the performance of the individual, the
team and the company. It also very tackles the challenges faced by the company to retain
its talented workforce.
At a time when organizations are debating the strategic importance of their human
resources, Infosys, a consulting and software services organization, includes its human
resources on its Balance Sheet to affirm their asset value1. Mr. Mohandas Pai, the Chief
Financial Officer of Infosys, provides a rationale for this practice:
"Investors examine financial and non-financial parameters that determine long-term
success of a company. These new non-financial parameters challenge the usefulness of
evaluating companies solely on traditional measures as they appear in a typical financial
report. Human resources represent the collective expertise, innovation, leadership,
entrepreneurial and managerial skills endowed in the employees of an organization. Our
representation is based on the belief that intangible assets provide a tool to our investors
for evaluating market-worthiness of Infosys."
As a knowledge-intensive company, Infosys recognizes the value of its human assets in
maintaining and increasing its competitive position. At the same time, Infosys realizes that
these assets can easily "walk away", as competitors in India and abroad covet its IT talent.
Consequently, the challenge facing Infosys is: "How can it attract, retain and develop its
human assets in a highly competitive and dynamic environment?" The answer to this
question may lie in the management of the 9000 plus Infocians (as the employees are
referred to), and that of many more to be hired in the future.
THE HR PRACTICES
Most of the HR practices of Infosys are a result of the vision of its founders and the culture
that they have created over the years. The founder advocated simplicity and maintained the
culture of the company. The employees are encouraged to share the learning experience.
Infosys was the first company to provide the employees with world class facilities for
training and working. The companys head office at Bangalore is located on a 70 acre
campus with multi-cuisine food courts and recreation facilities like swimming pools, a
gym, and a golf course for employees.
Most of the current human resource practices at Infosys result from the vision of the
leaders and the culture that they have created. Narayana Murthy, known for his leadership
and vision is the public image of Infosys. His leadership style is humble and
straight-forward, quite uncommon in the world of Indian business. Narayana Murthy
believes in sharing wealth with his employees and in leading by example. In a
knowledge-based business like Infosys, he sees the importance of consistency in rhetoric
and action in empowering employees. Narayana Murthy is credited with creating a culture
of closeness and empowerment at Infosys. His management style, rare among Indian
business leaders, is based on western management.
The other founding members of Infosys contribute their own specialties. Though less
known, they each play a critical part in shaping the culture and running the operations at
Infosys. These unique personalities, with their particular strengths, create the basis for an
uncommon culture at Infosys.
According to Narayana Murthy, what Infosys has on its side is "youth, speed, and
imagination and [they] are constantly innovating in every area of [their] operation." The
founders efforts have been paying off. According to a California-based management
consultant working in India, "Infosys has been critical in changing the mind-set of India."
Transparency is one of the important values held by Infosys. A practice illustrative of this
value is its very early decision to adopt the US GAAP standards, the most stringent
standards, for reporting its financial results.
Hema Ravichandar, the Senior V-P of Human Resources, sums up the characteristics of the
culture that distinguish Infosys from its competitors:
"Our emphasis on transparency and communication sets us apart from the prevalent family
owned businesses operating in India at. Our emphasis on getting the employees emotional
buy-in into the company distinguishes us from the MNCs that have recently entered the
Indian business scene."
The attempt to ensure emotional buy-in is evident in their effort to provide a self-sufficient
work environment for their employees. Infosys inaugurated its facilities in Bangalore
under the name of "Infosys City" in November 2000. Spread over 44.225 acres, it is
claimed to be the largest software services campus in the world. It has the largest `video w
all in Asia which allows for video conferencing simultaneously from multiple centers. The
existing buildings also form part of the Infosys City. The City contains food courts that
serve Chinese, North Indian, South Indian and Western cuisine. A state-of-the-art gym,
golf course, pool tables, table tennis tables and dance-floor are already in place. The sauna,
grocery store, an Infosys Store, 50 000 square feet
swimming pool and a lake with paddling boats will soon be part of the City. The
eco-friendly campus has more than 6,500 trees. The landscape includes stone paths, rose
beds, bamboo clusters with benches beneath them, fountains, and water recycling plants.
Besides the enticing work environment, Infosys provides state of the art technology to its
employees. For example, PCs used by Infocians are upgraded every two years.
Since its inception, till the early 1990s, Infosys recruited employees from engineering
colleges. The training imparted to them was largely informal and consist of on the job
training. In the early 1990s it experienced a shortfall of skilled manpower in the
organization due to which it could not realize its growth plan. The company during that
time developed the policy of recruiting personnel with generic analytical skills and high
learning potential and of
imparting them with specific skill required for the job offered in the company.
Infosys international business strategy revolves around 5 elements:
World-class operating model.
Focusing on human resources.
Providing managed software solutions.
Exploiting a well established off shore development model. Maintaining an equitable
client and business mix.
The company believes that in order to succeed in the competitive environment it is
necessary to recruit, train, and retain talented employees. Infosys aims at recruiting the
best available talent, training them according to the industry demands and retaining them
in a culture that promoted informal learning and free flow of ideas.
The career model that the Infosys created emphasizes on individual growth along with
organizational growth. The employees can identify their career path and the additional
skills they would have to obtain to move ahead in their career. Infosys identifies the
structural requirement of the people at different levels and creates a demand for the roles.
If the employees fulfill those demands they would inspire for that role. Infosys adopts a
role-based structure, which ensures an employee career growth through different streams,
customer interface stream, and domain consulting stream. In each of the streams, the role
of the employee is defined and for each role competencies have been identified and
created. Recruitment, training, performance appraisal and career progression are carried
out based on the roles.
The HR Challenges
To recruit, enable, empower and retain the best and the brightest
Create a readily deployable talent pool
Competency Based Role Enabling
Sustain Employee Motivation
Address Compensation Challenges
Enable IT in HR & improve processes to enhance productivity
ROLE and FUNCTIONS OF HR DEPARTMENT
The role of a HR department in an IT company differs from other verticals due to regular
innovations in IT, increased competition, and boom in IT sector, talent creation, training
and developing of current workforce according to the regular and fast paced changes.
The sheer size and growth that Infosys mean that the HR department has to enable better
communication and create structures where managers would be made more responsible in
handling people and delegating authority and training. Creating enough trained manpower
to sustain the growth of the company, which is currently experiencing high level growth, is
the most important role of the HR department with regard to policies. The HR department
needs to frame policies that support seamless growth, for both the employee and the
organization.
The involvement of the HR function is much greater in an IT company like Infosys since it
is highly talent centric, and retaining people is a huge challenge due to the numerous
opportunities that are globally available.
Thus today the HR at Infosys plays a key role in collaborating with the business to develop
the workforce strategy, which influences the companys operating strategies to meet the
corporate objectives.
The HR functions at Infosys are so designed that they add value to the organizations
long-term objectives. The HR department develops programmes that help attract and retain
talent, deliver compensation programmes that capture meritocracy and retain cost
