HRM Practices at Infosys

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