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Category: Miscellaneous

Autor: anton 09 May 2011

Words: 9626 | Pages: 39

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 company's 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 MNC's 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:

В• World-class operating model.

В• Focusing on human resources.

В• Providing managed software solutions.

В• 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 ChallengesВ…В…

В» To recruit, enable, empower and retain the best and the brightest

В– Create a readily deployable talent pool

В– Competency Based Role Enabling

В– Sustain Employee Motivation

В– Address Compensation Challenges

В» 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 company's operating strategies to meet the corporate objectives.

The HR functions at Infosys are so designed that they add value to the organization's long-term objectives. The HR department develops programmes that help attract and retain talent, deliver compensation programmes that capture meritocracy and retain cost competitiveness.

The HR function at Infosys plays a strategic role in optimizing performance through adequate staffing, training and talent management. The role of the HR is to add value to employees through various initiatives and retain them by creating interesting engagement programmes and growth related initiatives.

The HR plays a strategic role in guiding succession management, knowledge retention, and other enterprise-wide initiatives. It acts as a backbone providing manpower, infrastructure, training (internal/external), etc.

According to Bikramjit Maitra, SVP and Head, HR, Infosys Technologies, "HR today is no longer only about hiring or retaining people. The complexity of the business is expanding and there is a huge growth that is witnessed in the entire sector." As the competition among the global majors is intensifying. Hence the HR department is beginning to play a more consultative role than ever before. To cater to all this demand, HR today is a part of the management board of a company.

HR at Infosys is more customer focused, team-based, and functionally integrated. HR professionals are trained to work with the management to analyze and devise solutions for organizational problems. They are involved in strategic planning and aligning HR with the organization's mission and strategic goals

At Infosys HR is no longer considered to be a support function. HR is seen as a trusted business partner, and an advisor to business leaders. The HR is closely aligned with the business to enable business transformation and growth. One of the other important roles of HR is to create a culture that promotes the organization's values, a sense of community, and instill a feeling of pride and passion in employees. HR not only deals with people but also adds value in the planning stage through its understanding of people. It is the backbone to build a culture that is helpful to change, trying to implant some dynamism into the organization. It is also acting as a bridge to integrate initiatives, watching key processesВ—such as new hire orientation, training, and even compensation systems. These processes help support both the present and the desired culture."

..

Human Resource Planning

All quantitative analyses are based on a set of operating parameters, such as revenue, growth, and productivity parameters such as revenue productivity, utilization etc. These parameters, both on the demand-forecast side and the supply-capability side, act as guides to determine the right size of workforce in keeping with revenue guidelines. Based on analyses of data over multiple periods (months, quarters and years), the quantitative determination of the right workforce is transposed into mathematical models that are proven based on their accuracy and their predictive capabilities.

Methodologies for quantitatively measuring the right amount of workforce required, or simply put, the process of determining В‘head count fat', may not be an exact science but one that nevertheless the help HR managers at Infosys in arriving as close to the magic number as possible. At Infosys HR managers realized the importance of quantitative methodologies. According to Sanjay Purohit, associate vice presidentВ—corporate planning, Infosys Technologies "since IT is a people-driven business, the ability to calculate the right size of the workforce is very essential as it is directly linked to the ability to deliver revenues,"

What makes the quantitative measuring very critical is the possible negative repercussions that excess and under-recruitment can lead to. It is people who build the organisation, consequently any mismatch in people-related statistics, whether in terms of number or quality may upset the whole organisational dynamics and its objectives. Says Purohit, "The criticality arises from the basic need to balance and effectively manage the supply chain. However, an added dimension is that in the knowledge-based industry, the supply chain deals with talent and intellectual capital and hence balancing it is important, not only from a financial perspective, but also from a people perspective."

The steps in HRP at Infosys

В• Near accurate forecasting of revenue.

В• Have an efficient planning and recruitment engine in place.

В• Using various quantitative approaches in use for determining either the shortage or redundancy.

В• Determining whether the company needs more positions or layoffs is based on a series of ratios.

В• By using at historical patterns within the firm, the HR managers generally determine a reasonable range for these ratios.

В• Some of the complex internal ratios taken into account by HR managers are revenue per employee; employees to managers; employees to new customer orders or backlogged orders; employees to number of customers, etc

В• Apart from these, various external factors also come into play like the condition of the economy, etc.

The quantitative methodologies are very credible and reliable and have been well-proven over many periods. They are transparent to all stakeholders and dynamic in nature to factor the changes in the business environment and internal capabilities on an ongoing basis. As these quantitative methodologies are shared with all business units and recruitment numbers are agreed upon based on current and projected business plans, the biggest advantage is assurance of consistency and transparency.

Quantitative methodologies help meet the revenue projections. It is also important from the de-risking perspective as competencies, typically possessed by individual planners, are captured in a parameterized model. Even if an individual is not available, the model ensures that the knowledge base is not lost. Moreover, these quantitative methodologies are refined on a continuous basis, as the database of the company gets enriched over time and the company is able to draw better correlation between the various operating parameters. One cannot lose sight of the fact that quantitative methodologies are just a tool for arriving at a decision and they do not give decision themselves. The HR heads at Infosys that eventually take the decision. However, with the help of these enablers, this decision can be brought closer to accuracy.

Recruitment and Selection

Challenges relating to Recruitment and Selection

Recruitment planning is most important component in new people management with special reference to IT industry. The company has to deal with human assets so it becomes important and have good quality of people in the organization. We have to take the recruitment planning in very serious manner to ensure that we can get best talent in the organization.

In a tight job market, many organizations often experience precipitous and simultaneous demands for the same kinds of professionals. In their quest for manpower, they are cajoling talent around the world. In such a seller's market, software companies are striving to understand which organizational, job, and reward factors contribute to attracting the best talent; one having the right blend of technical and person-bound skills. This would mean a knowledge of 'the tools of the trade' combined with conceptualization and communication skills, capacity for analytical and logical thinking, leadership and team building, creativity and innovation. The Indian software industry suffers from a shortage of experienced people such as systems analysts and project managers, and attracting them is a key HR challenge.

Present Policies and Measures taken by Infosys to overcome the challenges related to Recruitment and Selection

The first step in the strategic management of a company's human resources is selection of assets with skills and potential consistent with its business requirements. Infosys's business requirements are flexibility and innovation. Accordingly, it has developed clear selection criteria consistent with this business need. Selection is based on individual's ability to learn, academic achievement, conceptual know ledge, as well as temperament for (and fit with) Infosys's culture. Further, because of Infosys's reputation as a premier employer, it can select from a large pool of qualified applicants within India. Competition among applicants is intense. One selection criteria that in particular stands out is the "Learnability". At Infosys, learnability is defined as the ability of an individual to derive general conclusions from specific situations and then apply them to a new unstructured situation.

P.S. Srivathsa, the Senior Manager of Human Resource Development, adds:

"Learnability is considered an important criterion because the project life cycle is short and technology is changing rapidly В– so the ability of the person to take the concept learnt in one setting and to apply it to another is very important. At Infosys learnability is assessed through written tests that include mathematical and analytical questions geared towards assessing the aptitude of a person to derive generic patterns from a situation."

For its entry-level positions, Infosys focuses its recruiting efforts on students with excellent academic background from engineering departments of Indian schools. The first step in the hiring process is manpower planning, where the numbers are determined. This planning usually takes place 20 months ahead of the hiring process. Recruitment includes campus interviews, as well as inviting applications over the Internet, newspaper ads, through job fairs, and HR consultants. The initial screening is based on such criteria as academics and experience. The shortlisted applicants undergo a selection test.

The test comprises two main components: arithmetic reasoning and logical reasoning. Because of time pressures involved in testing the large volume of candidates across the country, the reading comprehension section has been eliminated, cutting down the testing time to one hour. Tutorials or coaching classes offered by third parties are popular among individuals who wish to prepare for these competitive tests. Infosys has a question bank system from which questions are picked randomly for each test center. Those who score above the cut-off in the selection test are called for an interview.

Interviews are conducted jointly by the human resource managers and the technical manager. At the interview stage screening criteria used are aspirations, expectations, flexibility, presentation skills, and communication skills.

Rejected candidates may reapply after 9 months. People do come back and, if they have picked up the necessary skills, they are hired.

Detailed explanation of the Recruitment Process

Infosys takes adequate steps to recruit people on the basis of various factors to identify the right candidate. The following are the main factors that are considered while recruiting new employees.

В• Learnability:

Infosys give more emphasis on learnability, it means the ability to derive generic knowledge from specific experiences and apply the same in new situation.

В• Competency: I

Infosys give more importance to professional competence and academic excellence.

В• Other qualities:

Other qualities include analytical ability, teamwork, leadership potential, communication and innovation skills, along with a practical and a structured approach to problem solving.

Recruitment Programs:

Instep:

Infosys offers internship to student from foreign universities, through a program called Instep.

The duration of the Instep program was six weeks. Instep receives around 9,500 applications and chooses around 100 students as interns. The interns are from reputed universities and business schools like MIT, Stanford, Harvard, Wharton, Carnegic Mellon, Oxford, London Business School, Munich, Damstadt, INSEAD, and Royal Melbourne Institute of Technology.

The students are exposed to live projects during their internship with Infosys. The students undertake a study on a wide range of topics like equity based compensation in the HR department, the telecom industry in Europe, and new services that could be offered there and other topics such as work ethics, working hours, and employee motivation.

As a part of this program, Infosys conducts a seminar through which the interns are given a basic idea about Indian culture, cuisine, working styles, etc. in order to guide and help them during their internship, the interns were assigned to mentors who guided them on project related activities.

Global Talent Program:

The Global Talent Program is Infosys universities level recruitment program outside India. Trainees recruited under the program undergo a customized education and training program in Mysore, where they are trained on technical skills, client facing skills, and the global delivery model of Infosys. In 2006, 126 students from 85 US universities are offered employment in Infosys. Infosys are also looking at UK and other European countries besides Australia and China and planned to recruit 300 trainees from the US in 2007.

Campus Connect:

In July 2004, Infosys launched the Campus Connect program that focuses on grooming the students in engineering colleges and transforming them into industry ready professionals. Infosys invested Rs.100 million in the program, and published its in house courseware on its website. The program is aimed at reducing the burden of training at Infosys, as the students of Campus Connect program would have some amount of training imparted to them. The program also aims at solving issues such as outdated courses that are taught in some of the engineering colleges and the absence of industry orientation among the engineering colleges and students.

As a part of Campus Connect Program, Infosys launched a portal to connect students and teachers of engineering colleges with the company. The portal contains information and courseware related to IT industry that can be used by the students and faculty. The portal also contains online tests to help students assess their capability.

Other Programme:

Infosys uses Recruitment Management system (RMS) developed by Blueshift, an online solution provider based in Chennai, India. It has different modules for candidates who applied directly, for employees' referrals, for staffing agencies which submitted the profile of suitable candidate and for application submitted by campus placement coordinators.

Candidates who are not selected can reapply after nine month. In 2005 -06, more than 14, 23,000 candidates applied to infosys for employment, of these 48,750 were interviewed and 16,878 joined the company. Last year, the company had more than 1.3 million applicants for full-time position and hired only 1% of them.

Recruitment Procedure

Each year, out of the total recruitment infosys plans to hire 70% college graduates and 30% lateral workers. In the first quarter of

2006-07, 4,200 freshers were recruited while lateral hires were at 2,140.

The Steps in recruitment procedure:

Sources:

The Company uses different sources like Campus Interviews, advertisements in newspapers and from applications received through the company website.

Short listing of candidate:

Initially the candidates give the initial screening test based on their academic criteria and experiences. Short listed candidate are called for a written test which comprises of arithmetic reasoning, analytical thinking and English language skills. Candidates who scored the cut off marks in the selection test are called for an interview.

Interview Stage:

The interview panel consists of personnel from HR department and technical manager. During the interview a candidate's communication skills, presentation skills, flexibility and aspiration level are tested.

THE ORIENTATION PROGRAMME

The Induction programe for freshers is a 2 day event which takes place in an auditorium.

The Primary activities in the programe are as follows:

DAY 1:

1. Registration, Welcome & Context Setting.

2. Campus Connect Address.

3. Human Resources.

4. Finance and Accounts-Income Tax on Salary.

5. Anti Sexual Harassment Initiative.

6. Facilities and Environmental Policy.

7. Computers and Communications Division (CCD).

Day 2:

1. Education and Research.

2. SC Entry Level Test.

3. Joining Formalities.

4. Session on In-house Systems/Links.

5. C-Life.

TRAINING and DEVELOPMENT

Challenges related to Training and Development

This is another challenging area at Infosys. The company has to chalk out a suitable strategy for training & development so that employees are well equipped to handle the challenges in advance.

Rapid and unpredictable technological changes and the increased emphasis on quality of services are compelling software businesses to recruit adaptable and competent employees. Software professionals themselves expect their employers provide them with all the training they may need in order to perform not only in their current projects, but also in related ones that they may subsequently hold within the organization. As observed by Watts Humphrey, Fellow of the Carnegie Mellon University, "as software professionals gain competence, they do not necessarily gain motivation. This is because a creative engineer or scientist who has learned how to accomplish something has little interest in doing it again. Once they have satisfied their curiosity, they may abruptly lose interest and seek an immediate change". And when the rate of technological change is high; may be higher than the time required to acquire competence in one area; professionals could undergo psychological turbulence owing to the need to work in a new technology throughout their career. They want to gain new knowledge, which will be utilized by their organization. On the basis of the new learning they want to work in higher segments of software value chain. Therefore, constant up-gradation of employee skills poses yet another challenge for HR personnel.

Present Policies and Measures taken by Infosys to overcome the challenges relating to Training and Development

At Infosys, training and development is the next step in building its human assets where the objective is to match the available skills and abilities to its business requirements.

The spirit of learning ability among the people and an organizational commitment to continuous personal and professional development keeps Infosys at the forefront in a fast-changing industry. The framework for continuous learning at Infosys is built around a number of focused programs for the employees. These range from major initiatives such as the Infosys Leadership Institute to various ongoing management development and personal improvement programs. They complement a host of technology advancements and on going training options. The training plan provides a sequence of inputs as individuals grow through their professional career.

When new recruits from colleges join Infosys, they are trained through fresher training courses. They are trained then on new processes and technologies. As they reach the higher levels, they are trained on project management and are later sent for management development programs, followed by leadership development programs.

The Training Plan (which commences with structured induction and ends with leadership training):

В• Technical Training by Education and Research Department:

Infosys has an entry-level technical training program, which is for duration of 14 weeks. This program has been certified by educationists as being equivalent to a BS program in the US. The Education & Research (E&R) department at Infosys offers a variety of training programs on a regular basis for Middle level employees as well.

В• Quality Process Training:

Infosys has a strong focus on quality processes and methodologies. This training is tailored to the role that one is playing i.e. Software Engineer, Programmer Analyst, and Project Managers etc.

В• Personal Effectiveness and Managerial Programs:

Programs to enhance the managerial capabilities and leadership abilities, to enable better customer satisfaction, achieve organizational vision and create high performing multicultural teams.

В• ILI (The Infosys Leadership System): The Infosys Leadership System (ILS) and the Infosys Leadership Institute (ILI) address the issue of sustained growth in general and create a formal and committed system for developing leadership capabilities in Infoscions. The most significant attribute of the Infosys leadership development model is its partnership approach with the other groups in Infosys and the ownership of the entire process by the top management in what is termed as the В‘Internal Synergy Model'. ILI is based at a world-class physical infrastructure, in Mysore, India.

The education philosophy at Infosys is to equip the participants with the know-how to find the best solution, rather than to teach В‘one way to do it' and also to relate to real life situations. It also encourages employees to go in for further part time and distance education programs with fee reimbursement subject to eligibility criteria laid down by the policy.

TRANING NEW RECRUITS

Infosys conducts a 14.5 weeks technique training program for all new entrants. The company spent around Rs.2, 00, 000 per year on training each new entrant. The new recruits are trained at the Global Education Center (GEC) in Mysore, which has world-class training facilities and the capacity to train more than 4500 employees at a time.GEC,which was inaugurated in February 2005 is spread over 270 acres and was the largest corporate training center in the world with 58 training rooms and 183 faculty rooms at that point of time. Other facilities at the GEC included the largest gym in India, a cricket field a volleyВ–ball court,22 tables tennis court, swimming pool, six lane bowling alley, four screen digital auditorium, meditation hall, and a library. Commenting on the training facility, fortune wrote," Indeed, the $120mn Infosys center, which opened last year, is an odd combination of Disney world, club med, and a modern American university. It's enough to make you forget the poverty outside and believe you're in a first world fairy tale"

The new employees are trained on the culture and value system of Infosys and also on technical and managerial skills. The first three days of training comprise of orientation about the culture and values of Infosys, and about the company's customers. This is followed by five weeks of foundation courses on programming, systems development, and inter-personnel skills. In the following seven weeks, the new entrants are trained on technology courses like C++, UNIX, and HTML.

The training program equips the new entrant for a challenging career in software and comprises of generic conceptual courses, platform specific courses, a mini project, and an end term project, which is designed in the form of real life projects. The new entrants are also imparted training in communication skills, interpersonal skills, customer interaction, management development, and quality systems.

Care is taken to ensure that the necessary technical skills are provided along with soft, interpersonal and communication skills, and quality-related competencies. There is a feedback mechanism to ensure continuous improvement in the training program.

TRAINING PROGRAMS FOR EMPLOYEES

Infosys also conducts training programs for experienced employees. The company has a competency system in place which takes into account individual's performance, organizational priorities and feedback from the clients. According to the system, every employee is to have a training plan based on the identified competencies. The training interventions are organized in four areas-technical training, managerial and skills training, domain training, and training on quality processes. Technical training accounts for half of the total training efforts.

Training needs are assessed through the regular planning meetings. In these meetings, the expected projects for the coming year are forecasted. These projections determine skill requirements (e.g., 300-400 project managers for 500 projects). Based on current skill availability and skill demand, training needs are determined. The education and research department also tracks specific technologies; the number of requests for the technology from clients may also determine course-offerings.

Infosys also offers training and development support to academic institutions by providing exposure to industry, in the form of sabbaticals at Infosys, training programs, and sharing courseware.

The E&R department conducts training courses which are mainly project-specific. Most of the training is class-room based while the training through e-learning is limited. Employees can nominate themselves for the training programs. For each of the streams В–project management, customer interface, technical, program management, and domain consulting, the behavioral and technical competencies require to be outlined. Training is also imparted in other streams including quality process training, personal effectiveness, and managerial development. Every quarter, over 100 technical training courses are offered. The technical training is imparted for eight days.

The quality process training is also conducted on a regular basis. For software engineers, quality process training includes courses on configuration management, defect prevention, and an introduction to CMM, for the programmer analysts, the quality training comprised defect prevention training and an internal auditors training. At the program manager level, the quality process training included implementing CMM and statistical process control.

The need for the managerial development programs was assessed through the performance appraisal process. During performances appraisal, the employees are asked to choose, in consultation with their superior, areas in which they need training. Then the required training is imparted and during the next appraisal the improvement is tracked. The E&R department takes complete responsibility for imparting the training to the employees. It also conducts research on emerging technologies and designs the training programs according to the trends in the industry.

Infosys conducts over 160 middle level training programs. The training needs are determined depending on the business needs. The management determined the upcoming technology requirements and communicated these to the E&R department. The senior executives of E&R and other departments decide on the content and duration of the course. Another way of determining the training needs was during the process of planning. At the planning meetings, expected projects are forecasted along with the required skills to arrive at the training needs.

Apart from technical training, Infosys conducts several other training programs including soft skills, communication, building competency, and personal effectiveness. Personnel effective training is imparted through the Infosys finishing school, where employees are trained on business etiquette, business communication, assertiveness skills, and customer skills for a period of eight days. A milestone program-PRAVESH addresses the needs of the employees when they assume higher positions in the organization. For employees schedule to travel abroad for the first time, a program called "first time traveler" is conducted, which aims at sensitizing the employees to new cultures and workplace. The training is spread over six modules and is conducted over a span of three days. It includes personal trait understanding, culture and projects elements appreciation, customer interfacing, communication skills, corporate etiquette, and social interfacing.

Another training program called "chips" {cultural highlights and international practices sensitization} is targeted at employees traveling to the US, EUROPE, and the Far East countries. A one-day program, which is meant for employees traveling to different countries. For employees who are to stay in another country for long time periods; Infosys conducts language training. Infosys believes that all employees have to ultimately serve the customer, and conducts a program called C-enabled, or customer-enabled. This program helped the employees to interact with the customers

Career Development

Challenges related to Training and Development

Retention and motivation of personnel are major HR concerns today at Infosys, this can be brought about by proper Career Development procedures in place. It has been observed that the average tenure for an IT professional is less than three years. Further, the use of new technologies, the support of learning and training, and a challenging environment ranked higher than competitive pay structures as effective retention practices. Recent survey has showed that while the professional gave importance to personal and cultural job-fit, HR managers believed that the key to retention was salary and career satisfaction.

Money is a prime motivator for 'starters', but for those into their third or fourth jobs, their value-addition to the organization id more important. Monetarily, offering 'the best salaries in industry' is the minimum Infosys is doing, apart from performance-based bonuses, long-service awards, and stock options. Infosys frequently conduct employee satisfaction and organization climate surveys, and are setting up Manpower Allocation Cells (MAC) to assign 'the right project to the right person'. In fact, Infosys even helps employees with their personal and domestic responsibilities to satisfy & motivate their workforce!

Present Policies and Measures taken by Infosys to overcome the challenges relating to Career Development

Charged with the responsibility of developing human assets in a fast paced environment, career management at Infosys faces two challenges: a shift from a focus on technical expertise in the career to a focus on management expertise, and the speed with which this refocusing must be accomplished.

Nandita Gurjar, the Corporate Development Manager describes the first challenge as follows:

"Management skills have become increasingly relevant for Infosys because of its ever increasing volume of business as well as its shift towards consulting business. As the number of projects to be handed has increased, the demand for project management skills in goal setting, communication, coaching, delegation and team management has also increased. Invariably the technical personnel are chosen to move to a management track. This choice is ironic in some ways because the better an individual is in technical skills (such as writing code) the more likely he/she is to be moved away from using the technical expertise into a management track requiring management expertise. Technical expertise provides an individual legitimacy and respect from co-workers making them a natural choice as a team leader. Within a short time span the team leaders are required to manage projects, clients and the people working on these projects. It, therefore, becomes necessary for the individual to abandon their technical expertise В– something that has been very salient to their identity in the course of education and early career, when they aspire to be smart "techies", and start collecting a repertoire of managerial capabilities.

While developing management skills by attending management development programs 2-3 years ago was one of the "nice things to do"; it has now become a business necessity. The nature of management skills required is further complicated by the fact that at Infosys, managers are also required to mange from remote. Team members are spread geographically and may not meet each other or the team leader for a year or perhaps never. As hiring overseas gathers momentum, the demands may be further exacerbated by the fact that team members may belong to different backgrounds and may not completely understand the organization and the country culture.

The second challenge facing career management is the "compression" in career, an effect of the speed at which employees must move from one stage in their career to another. The new hires are very young (22 years old) and they are put under managers who are 24 years old. At 30 these employees are managers of managers. At 35 an individual can potentially become a vice-president. Management skills become necessary at a very early stage in the life and career of an individual at Infosys. Rapid change is a constant challenge. Nandita summarizes this challenge as follows:

"It is a challenge to teach a 24-year-old to become a manager. The young individual believes, "I have not yet grown", but you are saying, "you have to do it". Just when you become used to something you are pulled out of it and it is time to move on to something else. Those who can cope with this change emerge as leaders (perhaps at the age of 32); others fall back and become comfortable where they are. The whole career development progress in Infosys is therefore comparatively shorter than in other companies."

To address the pressing need for management development, Infosys has put in place some training programs. These include:

В• First time manager program: This is a 5-day program for new managers, designed to change a manager's mindset from an individual to a more managerial one, where the focus has to shift from managing individual performance to managing team performance.

В• The manager of managers program: The program is geared towards teaching managerial skills (such as delegation, team management) to more senior managers.

В• Infosys leadership program: The program emphasizes the dynamic environment outside of Infosys and the adaptation to its environment. Once again, the objective is to create a "mindshift" for the senior managers, from looking inward at the internal operations to becoming aware of external change factors.

Compressed careers bring with them another challenges: stress and burnouts. With technology-assisted communication devices (e.g., Palm pilots, cell phones and home computers) employees are multi-tasking, even in meetings. The potential for stress is enormous, intensified by the time zone differences that make the employees accessible around the clock. Thus, working around the clock, coupled wit extensive travel and minimal time to manage work and non work needs may cause many employees in the future to burnout.

PERFORMANCE APPRAISAL

Challenges related to Performance Appraisal

Performance appraisal is key concern for HR personnel as the Data relating to performance assessment of employees are used for several purposes. The results of performance appraisal are used to

В• To effect promotions based on competence and performance

В• To confirm the services of probationary employees upon their completing the probationary period satisfactorily.

В• To assess the training and development need of employees.

В• To decide upon a pay raise.

В• To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development.

В• To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the rate.

Present Policies and Measures taken by Infosys to overcome the challenges relating to Performance Appraisal

Performance appraisal is a rigorous comprehensive process at Infosys, tied to the future development of the individual's skills and capabilities. First, an evaluation of personal skills is carried out for the tasks assigned to an individual during the appraisal period. The criteria used to evaluate performance on tasks are derived from the business goals and include: timeliness, quality of work, customer satisfaction, developing others, knowledge dissemination, peer satisfaction in the team, increased business potential, and developing optimal task solutions.

The evaluation of personal skills and abilities is carried out for the following: learning and analytical ability, decision making, team leadership, change management, communication skills, teamwork, planning and organizing skills. Each criterion is described and measured on a 5-point scale. Further, each of the scale points are anchored to descriptions of expected behavior.

Performance appraisal is carried out semi-annually, in July and January. 360-degree appraisal is carried out for all employees. Appraisals are sought from peers, direct supervisors, subordinates and customers. A minimum of 6 to 7 appraisal reports are collected for each employee. All appraisal forms are completed on-line and the data is maintained in a central database. The appraisal information is used to identify training courses and other developmental interventions.

Future objectives for both task accomplishment and individual skills development are based on the results of the semi-annual evaluation.

Performance Appraisal Techniques at Infosys

Infosys uses different types of performance appraisal in order to evaluate candidate.

В• Personal Skills:

The evaluation is done on the basis of personal skills for the task assigned to an employee during the period of appraisal. To evaluate performance different criteria like timeliness, quality of wok carried out by the employee, customer satisfaction, peer satisfaction, and business potential were considered. The personnel skills are also evaluated on the basis of learning and analytical ability, communication skills, decision-making, change management and planning and organizing skills. Each of these criteria are measured on a scale of 1 to 5 (with 1 signifying above the expected performance level and 5 below the expected performance level).

Performance appraisal is carried out twice a year, with appraisals from supervisors, peers, subordinate and customer. All the appraisal forms are completed online and appraisal data is maintained in a central database. The individual appraisal data is is used to determine the training needs and other developmental intervention of the employee.

В• Performance Linked Compensation:

In 2000, infosys had a performance linked compensation system, prior to which only 10% of employee-received incentives linked to their performance. From 2001 onward, for employees who were above the level of programmer analyst, Infosys introduced the company's performance linked incentives at 10% of the fixed pay. From 2002 onward, the company stared giving rewards that are based on individual performance along with incentives based on the performance of the company.

В• Three tier of Performance:

In 2003, Infosys used another model where an incentive was based on the three tiers of performance. The three tiers are overall corporate performance, unit performance, and the performance of the concerned employee.

 At the Lowest level, 10% variable of the total pay was variable.

 At the Middle level, 30% of the total pay was variable.

 At the Top level, 50% of the total pay was variable.

In mid-2006 a new compensation system called Deferred compensation scheme was introduced, through which it was planned to create a compensation pool and reward the employee out of that based on their performance. Basically the performance is based on longer you stay the better the reward to cut attrition.

Example of one Behaviorally Anchored Rating Scale

Timeliness (includes the ability to plan, schedule and track the assigned, in such a manner that the work flows as envisaged and the work is completed on time).

A Way above expectations

Displays abilities to plan, schedule and track work independently. Accomplishes work w ell in advance resulting in being able to contribute towards other activities of the project.

B+ Exceeded expectations

Displays ability to plan, schedule and track work. Accomplishes work within allocated time.

B Met expectations

Displays ability to plan, schedule and track work. Able to meet project deadlines.

B- Met expectations with assistance

Needs assistance in planning tracking work. Unable to meet project deadlines independently.

C Below expectations

Not able to plan, schedule and track work for most of the assigned responsibilities. Severe impact on the project deadlines.

COMPENSATION POLICIES

Challenges related to Compensation

Increasing demands of technology coupled with a short supply of professionals (with the requisite expertise) has increased the costs of delivering the technology. This makes incentive compensation a significant feature, with the result that software companies have moved from conventional pay-for-time methods to a combination of pay-for-knowledge and pay-for-performance plans. With the determinants of pay being profit, performance and value-addition, emphasis is now on profit sharing (employee stock option plans) or performance-based pay, keeping in view the long-term organizational objectives rather than short-term production-based bonuses. Skills, competencies, and commitment supersede loyalty, hard work and length of service. This pressurizes HR teams to devise optimized compensation packages, although compensation is not the motivator in this industry.

Present Policies and Measures taken by Infosys to overcome the challenges relating to Compensation

"We compensate our human assets in three ways. We add learning value through training and development and appraisal practices. We add emotional value through initiatives directed towards supporting employees with their work and personal needs, and we add financial value through monetary compensation."

(Hema Ravichandar, Senior Vice President Human Resource Development).

Infosys compensates its human assets in three ways. Infosys adds learning value through training and development and appraisal practices. Infosys adds emotional value through initiatives directed towards supporting employees with their work and personal needs, and we adds financial value through monetary compensation.

Although Infosys faces strong domestic and international competition for its human assets, through enticing offers from competitors, the compensation level at Infosys equals the average industry level for each country. It is neither above market nor below the market level.

Infosys is one of the first Indian companies to offer stock option plans to their employees. Currently Infosys offers three option plans that cover all Infosys employees:

1994 Employees Stock Offer Plan:

Established in September 1994, the plan provides for the issuance of 6,000,000 warrants to eligible employees.

1998 Stock Option Plan:

Infosys 1998 Stock Option Plan provides for the grant of no statutory stock options and incentive stock options to employees. A total of 1,600,000 equity shares are currently reserved for issuance pursuant to the 1998 Plan. Unless terminated sooner, the 1998 Plan w ill terminate automatically in January 2008. All options under the 1998 Plan w ill12 Please see Appendix C for description of one such scale.13 "The Lightening Spark," Silicon Technology and Business Magazine, August 1998, 50-51.9 be exercisable for ADSs represented by ADRs.

1999 Stock Option Plan:

The 1999 Plan provides for the issue of 6,600,000 equity shares to employees. A compensation committee comprising a maximum of seven members administers the 1999 Plan. Options are be issued to employees at an exercise price not less than the FairMarket Value. Under the 1999 Plan, options may also be issued to employees at exercise prices that are less than Fair Market Value, only if specifically approved by the members of Infosys in a general meeting.

In addition, such statutory benefits as pension, medical and leave, Infosys also offers a loan program that employees find very attractive. Loans may be taken for pursuing a degree program Such as an MBA, or to meet such personal needs as purchasing a car or a house. The interest rate varies (4% for a car purchase and 0-4% for house purchase). To date, almost all loans have been repaid.

Employee Relations and Organizational Culture

The meritocracy helps Infosys deal with the challenges posed by globalization. In particular, three challenges are continually on the minds of Infoscions. The first challenge emerges from the need to work with and within different cultures.

According to. Shibulal :

"We cannot be one single homogeneous entity all around the globe. We need to think as an organization, but also be local with respect to leadership style, management, the way we interact with clients, compensation, recruitment etc. So, even though our values are pretty clear, we may need to operationalize them slightly differently around the world."

The second challenge emerges from the need for workforce diversity as Infosys globalizes. According to Ms. Ravichander:

"A key challenge in becoming a truly global company is to bring in diversity into our workforce. We are right now mostly Indian and to shift to a global mindset, we need to bring in people from different backgrounds."

The third challenge emerges as Infosys seeks to preserve its own culture even as it becomes more diverse. According to Ms. Gurjar:

"A big step we are taking is to educate our customers about our culture. Earlier it was we who would change; but now, we are asking, why should we be the only ones to change. Now we are doing cross cultural programs at client locations so that they can work better with Indians."

Measures adopted at Infosys to overcome the challenges of Globalization and diversity

At Infosys the management is positive about assessment of these challenges. It is believed that as people of different value systems and backgrounds mingled, their vision would broaden and that the perceived differences would diminish. The Infosys's internship program has allowed interns from different countries to work on summer projects in India. The internship program provides potential employees with a window into the Infosys culture while at the same time sensitizing Infoscions to the diversity of international cultures and outlooks.

Eventually, governance of intellectual assets is an ongoing affair. It is not a state one reaches but a state one strives to maintain. It requires that processes be put in place to distinguish right from wrong, to question assumptions when everything appears to be going well, to offer representation to even the most silent or junior members of the organization.

At Infosys, a forum called the Voice of the Youth is illustrative of governance as a process. Junior Infoscions are invited to attend Board Meetings to voice their opinions freely on any aspects of the business including Infosys's value system and culture. In an article Ms. Gurjar explained the growing impact of the Voices of the Youth on Infosys culture and value system:

"Some of the youths questioned the interpretation of the values and said that we need to re-articulate their meaning. We had a one-day workshop where we called 50% of the senior management and the voice of the Youth to get together and brainstorm. The youngsters challenged the definition of integrity and finally we came to a consensus on what it ought to mean."

Other challenges faced and measures taken by Infosys to counter them:

So far, Infosys has grown continually by employing the resources that it has accumulated as platforms for improving existing initiatives and for launching new ones. In this sense, Infosys has demonstrated what it means to be a scalable corporation. However, this process will surely be put to the test as Infosys continues scaling across value creation activities, in terms of size and across cultural value spaces.

Scaling across the value creating activities

A key strategic initiative at Infosys is to move up the value chain in the software services industry. This implies a migration of services from the low-cost project execution space to the high-margin end-to-end solutions space. Such a transformation would make it possible for Infosys to charge its customers higher rates for consulting services while strengthening its ability to bundle project execution services along with consulting. According to Mr. Balakrishnan, Infosys's dream is "to get US revenues at Indian costs."

Yet, there are challenges associated with scaling up the value chain as Mr. Pai pointed out:

"Going up the value chain is a fundamental shift that will need to occur slowly. We need to learn many things as we make such a shift. It boils down to an ability to manage people. Also, it is difficult to have consistent value systems at both the high and the low ends. The interpretations of the value systems at the two ends are different. Moreover, each end is at different stages of evolution."

The very act of moving up the value chain means that the iterative model of software development and close contact with clients will increase. Infosys will not have as much flexibility to move higher-margin consulting projects off-shore as it has in the execution of projects and provision of low-margin services. Indeed, the proportion of high-end projects that are being performed on-site is increasing. Additionally, as competition for programming talent increases in the global IT sector, salaries in India are also rising, pressuring Infosys to raise its incentive and compensation packages. This in turn will increase the cost of executing projects, making it difficult for Infosys to maintain its profit margins.

Scaling in size

As Infosys contends with problems arising from its move up the value chain, it will simultaneously have to confront issues that rapid growth brings. Infosys executives believe that organic growth alone may not be enough to develop complementary skill-sets needed or enter new markets or industry domains rapidly. Therefore, Infosys is evaluating potential acquisition opportunities as a vehicle for global and rapid growth.

An important issue, then, is Infosys's capability to cope with growth through acquisitions or mergers. Will growth through acquisitions compromise the culture that the Infosys founders have so carefully nurtured? Unless the potential target has a compatible culture, it would be difficult for Infosys to integrate the alien culture without disrupting its well-oiled processes and well-defined values. Mr. Gopalakrishnan, however, says that Infosys is aware of the problems and preparing to meet the challenges:

"We feel very uncomfortable working with certain kinds of organizations. So, we have to be very careful in choosing the right target. We also have a very strong culture. That makes it all the more difficult to integrate. We are aware of this and we are preparing for the problems. We are talking to some experienced people who have done this before to find out what the issues were and how they overcame these issues. We are strengthening our Board to make sure we have the capabilities at the highest level to manage this task. We are being selective and we will take our time. We are not going to merge or acquire tomorrow in a hurry. We have also decided on the process. We want a friendly acquisition or merger, not a hostile one. There has to be a meeting of the minds at the senior level and we will go ahead only if management teams in both organizations agree that this is the best course and are willing to work towards making it successful."

Despite the careful thought Infosys executives have given to potential acquisition targets and the subsequent integration process, any effort at integrating acquisitions would still be fraught with formidable challenges. Another challenge faces Infosys in terms of scaling up in size. Growth, coupled with geographic dispersion of its employees, may make it more difficult for Infosys to leverage its collective knowledge effectively. Even though a major portion of Infosys's employees are still based in India, Infosys has not been completely successful in its KM initiative. Indeed, Infosys is realizing that it is far easier to develop and deploy the technological component of knowledge management systems than it is to encourage its employees to contribute to and leverage these systems effectively.

Scaling across cultural value space

Infosys is also seeking growth by gaining access to new markets and technologies. Given that over 98% of Infosys's revenues accrue from outside India, any such growth impetus has to be global in scope. As Infosys becomes more global and moves up the value chain, its employees may have to spend more time removed from their base in India. Over time, this would make them identify more with their clients than with Infosys, their employer. Ms. Gurjar explained:

"Sometimes on flights, when I ask the person next to me (who doesn't know me) as to where they work, they respond that they work for the client company even though I know that they work for Infosys. They go to the client company's parties, their events, they wear their T-shirts. When they come back after completing the project, they have a re-culture shock."

Not only does this impose enormous lifestyle and psychological burdens on remote employees, but this also complicates the task of managing and monitoring such employees. Infosys is trying to tackle this problem by instituting several channels of communication В– including company-wide emails, newsletters and magazines В– to strengthen ties of remote employees with their Indian counterparts and provide news on their home-front. Furthermore, Infosys trains its managers to manage and monitor their teams more effectively over distances, emphasizing a systematic process involving periodic meetings, reporting and evaluation. However, as Infosys moves up the value chain and grows globally, the length of time spent by employees at customer premises will increase. This may result in their forsaking the Infoscion culture, values and processes, which may make it difficult for an increasingly global organization to configure and integrate its systems, processes and business units well. Indeed, as Ms. Ravichander mused:

"As we grow globally, we would like the Infosys culture, values and processes to permeate rather than the local mindset to take over. But this may not happen."

Such geographic dispersal and loss of identity may also make it difficult for Infosys to

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