Infosys Casestudy

Name: Vinayak Bhomkar Roll No: E2009055 Subject: Human Resource Management Topic: Infosys (A) Strategic Human Resource Management

Q. What should Hema Ravichandar do to recapture the heart of  Infoscian?  The advent of the HRM has brought the linkage between employer-employee relationship and strategic management to sharp focus. A strategy is understood of way of doing something. Strategic management refers to the process of formulating and implementing strategies. After executing strategies, they need to be evaluated for their usefulness and effectiveness. Strategic management offers several financial and nonfinancial benefits to a company.

Strategic Human Resource Management Strategic HRM defines the organization’s intentions and plans on how its business goals should be achieved through people. It is based on three propositions: first, that human capita capitall is a major major source source of compet competitiv itive e advanta advantage; ge; second, second, that that it is people people who implement the strategic plan; and, third, that a systematic approach should be adopted to defining where the organization wants to go and how it should get there. Strategic HRM is a process process that involves the use of overarching overarching approaches approaches to the development development of HR stra strate tegie gies, s, whic which h are are inte integra grate ted d verti vertica cally lly with with the the busi busines ness s stra strate tegy gy and and horizontally with one another. These strategies define intentions and plans related to overall organizational considerations, such as organizational effectiveness, and to more specific aspects of people management, such as resourcing, learning and development, reward and employee relations. Strategic HRM addresses broad organizational organizational issues relati relating ng to change changes s in struct structure ure and cultur culture, e, organi organiza zatio tional nal effect effective ivenes ness s and and perfor performan mance, ce, matchi matching ng resour resources ces to futur future e requir requireme ements nts,, the develo developme pment nt of  distinctive capabilities, knowledge management, and the management of change.

Case analysis Before we could move to Hema Ravichandar’s Ravichandar’s question let us have a brief overview on  July 2, 2, 1981 in Pune by N R Narayana about the case. Infosys which was founded on  Murthy and seven others: Nandan Nandan Nilekani, Nilekani, N. S. Raghavan, Raghavan , Kris Gopalakrishnan, Gopalakrishnan, S. D. Shibulal, Shibulal, K. Dines Dinesh h and and As Asho hok k Aror Arora. a. With With a small small inve invest stmen mentt of Rs. Rs. 10 10,0 ,000 00 and and nurtured the organization to a world-class company currently valued at Rs. 50,000 crores ($10.75 ($10.75 billion). Infosys believes that leadership leadership is one of the most essential ingr ingred edie ient nts s of orga organi niza zati tion onal al su succ cces ess s whic which h is prov provid ided ed by its its Chai Chairm rman an,, N R Nara Narayan yanmu murt rthy. hy. Lead Leaders ershi hip p is base based d on high high busi busine ness ss vision vision and and pred predom omina inant ntly ly suppor supportiv tive e styles styles.. Top managem management ent emphas emphasizes izes on open door door policy policy,, continu continuous ous sharing of information, takes inputs from employees in decision making, and builds personal rapport with employees. As we have seen over last few years, we have seen smoo smooth th tran transi siti tion on from from N R Nara Naraya yanm nmur urth thy y to Nand Nandan an Nile Nileka kani ni and and from from Nanda Nandan n Nilakeni Nilakeni to Kris Kris Gopalkr Gopalkrish ishnan nan (2007) (2007) withou withoutt any adverse adverse effects effects on the compan company y outlook and each one has proved to be an able leader taking company forward. Since Infosys is in knowledge-based industry, it focuses on the quality of the human resources. Out of total personnel, about 90 per cent are engineers. At the entry level, it emphasizes on selecting candidates who find the company’s meritocratic culture satisfying, superior academic records, technical skills, and high level of learn ability. The company emphasizes on training and development of its employees on continuous basis and spends about 2.65 per cent of its revenues on up gradation of 

employees‟ skills, and around 50% as employee costs. In spite of thousands of people  joining every month, Infosys has been able to maintain its training standard mostly due to its highly matured processes capabilities and investment in infrastructure. In 1999, Infosys was growing at a very rapid rate and doubling in size after every 20 months. Its management realized that a large small company till now, Infosys was well on its way to becoming a small large company. Until March 2001, the concept of  variable pay applied only to Infosys senior management which constituted 2% of the Infosys population and 10-15% whose compensation derived from an individualperformance based component.

Introduction of Broad-banding pay structure  This concept actually collapsed 15 layers into 7 bands and was the prime reason for the employee dissatisfaction and discontent reached to its peak. Rapid changing HR policies bred confusion amongst the employees in project teams and managers alike. Middle and senior managers were made responsible by HR for communicating these changes effectively to employees; but some were unsure of certain aspects of the change and could not face the scrutiny of employees. Coming back to Hema Ravichandar’s question, yes, she will be able to keep the heart of  the Infoscions. Firstly, she needs to prepare a questionnaire in order to understand the actual problems the Infoscion are facing. Yes, there is a feeling of inequity as the company size is increasing rapidly. From March 2000 to March 2003 Infosys increased their work force by 80%. Some of the factors she can use to get Infoscions back on track: •

High involvement in the management  This approach can be used by treating employees as partners in the enterprise whose interest are respected and who have voice on matters that concern them. It is concerned with communication and involvement. Create a climate in which a continuing dialogue between managers and the members of their teams takes place in order to define expectations and share information on the organization’s mission, values and objectives. This will establish a mutual understanding of  what is to be achieved and a framework for managing and developing people to ensure that it will be achieved.

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Maintain the employee equity It is very important to maintain the fair equity amongst the employees of all levels. This will keep them motivated and it will surely help in developing relationships of their co-workers and the organisation. When the ratio of inputs to outcomes is close, than the employee should have much satisfaction with their  job. As Infosys increased their staff by 80%, it is very important to maintain the employee equity properly.

 The emotional bonding has worked pretty well for the Infosys but it is very important to eliminate the drawbacks associated with that. They should try encouraging the employee to be more creative so that they can help in improving the process associated with the development of software. It is very important that an organisation should acknowledge the innovations as this would help to enhance moral, motivate performance and celebrate initiative or it will help them to improve better. Their active participation ensures that innovation doesn’t go through frustrating cycles of fits and starts. Rewards and recognition play a critical role in energizing them. It is very important that we recognise employee effectively so that we can reinforce them. This could be done in monetary and non-monetary terms.

Managing scale and attrition risk: Infosys started with 7 people but as the time progressed, it expanded to 15000 employees (March 2003). It became difficult for the middle level and senior managers to be in touch with the lower level employees and so they were unable to understand the frustrations of the employees. There should define a proper strategy in order to tackle the issue. Possibly we can increase the HR team to understand employees. Their problems associated with the work or some kind of  feedback mechanism needs to be introduced against the top level managers.  The immigration issues needs to be properly resolved as this was Infosys dominant levers of motivation exercised by senior managers to reward high performers. The employee working for US clients needs to be properly updated with the government policies of the visa restrictions.

Broad-banding  This is used to flatten the organisation and remove levels of management and Infosys did that by breaking down 15 levels to 7 bands. With broad-banding, a manager can more easily encourage his/her employees to broaden their skills and abilities. This is valuable to organizations because employees with broad skills and abilities are critical for the success in a total quality/continuous improvement environment. But there were some potential problems associated with the broad-banding. Maintaining the perception of pay equity can be more difficult. If two employees are in the same broad salary band doing similar work and one employee is paid near the bottom of the range, and the other is paid near the top of the range and it difficult to justify the salary differential between two employees. Salary ranges provide a mechanism to control the salary growth of individual employees, and thereby the salary costs of an organization. With salary ranges, an employee's salary stops at a certain point, until they acquire the skills necessary for advancement to the next higher level position. Broad-banding, with its high salary range maximums, does not have the salary control feature of  the traditional salary structure. •

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