Infosys: Strategic Human Resource Management

This case is about the human
resource management at Infosys

which is important to improve the
employee satisfaction and thereby
being the best performing company
and best employer.
Infosys: Strategic
Human resource
Management
Group 1
Arpit Pal 2016PGP078
D Manoj Kumar 2016PGP115
K. Pavithra 2016PGP159
Kanish Kumar 2016PGP168
Lokesh 2016PGP192
Mahata sudeshna 2016PGP200
Rashi Chaturvedi 2016PGP308
LETTER OF TRANSMITTAL
To,
Mr. Patturaja Selvaraj
Faculty at IIM Indore
Infosys Case Submission
Dear Sir,
We are pleased to submit a report on the case “Infosys: strategic human resource
management” following the review of all the strategies and policies in place and the
challenges that come in terms of global competition and employee satisfaction.
Based upon the facts of the case, we present a detailed report containing the details
of the problem and the recommended course of action.
We thank you for the opportunity to participate in the process.
Yours truly,
Arpit pal
D. Manoj Kumar
K. Pavithra
Kanish Kumar
Lokesh
Mahata Sudeshna
Rashi Chaturvedi
EXECUTIVE SUMMARY
This report provides a comprehensive analysis of the case ‘Infosys: Strategic Human
Resource Management’. Infosys was founded in 1981 by a group of 7 members.
During the first decade of its operation, the government regulations were making it
impossible for Infosys to realize its vision of becoming a global company. The strong
will of one of its founders, Narayana murthy, ensured that the company sustained
the downturns and continued to exist. The economic liberalization of 1991 opened
the door to a lot of opportunities that benefited the software industry on the whole.
Infosys changed its strategy and shifted its focus from Body shopping to Offshoring
and Global Delivery model. Infosys took a number of measures to improve its brand
equity abroad. In that line it became the first Indian company to list on the NASDAQ.
While liberalization helped in the overall industry growth, it also led to several
challenges that arose due to the entry of multinational technology firms into India.
These firms attracted talent from Indian firms because of their global brand and
better compensation packages. Infosys executed several policy changes in order to
cope with its expansion. It diversified its portfolio to provide end-to-end solutions,
introduced variable pay system to all employees, started moving towards role-based
structure and introduced promotion policies that provided promotions based on
performance rather than seniority. These rapid changes led to huge apprehension
among the employees since they were not clear on the intentions of the company.
This in turn led to increase in employee dissatisfaction and turnover. Infosys, which
was ranked highest in 2001 and 2002 on Best employer lists, fell off that position in
2003. After a detailed analysis of the various measures that can be taken to boost the
employee satisfaction and ensure sustained growth, our recommendation is to
ensure effective communication in all the levels of the company – both employee to
employee as well as management to employee; effectively communicating the need
and intentions of the policy changes will improve employee satisfaction, reduce
employee turnover and help in sustainable growth.
TABLE OF CONTENTS
1. Executive Summary
2. Situation analysis
3. Problem statement
4. Options
5. Evaluation criteria
6. Evaluating the options
7. Recommendation
8. Action plan and implementation
SITUATION ANALYSIS:
1.) Hema Ravichandar is the HR leader of the Infosys group and is given the
challenging task of ensuring that Infosys is in the top 10 list of both best
performing companies and best employers.
2.) Infosys had been ranked No.1 in the business Today Best employer survey
both in 2001 and 2002 but it fell of the best employer list in 2003.
3.) From March 1993 to March 2003, Infosys had a compound annual growth rate
of 65% and its revenues jumped from US$5 Mn to US$754 Mn.
4.) Infosys was founded in 1981 by Narayan Murthy and six of his colleagues but
before that it encountered the hard reality of Indian bureaucratic and
regulated environment and had a near death experience.
5.) After a near death experience Infosys changed its strategy and shifted its focus
from Body shopping to Offshoring and Global Delivery model.
6.) Traditionally Infosys focussed on lower end of IT value chain namely IT
management and implementation but over time Infosys moved towards
providing higher end value added services.
7.) There’s an emotional bonding at Infosys that enables employees to pursue
their area of interest and there’s also fun and community empathy at
workplace along with the focus on values.
8.) There’s a huge power and communication gap between the middle/senior
managers and the employees.
9.) Company already has an appraisal system in terms of Variable pay and
Promotion policy but despite that the employee satisfaction level is
continuously declining.
PROBLEM STATEMENT
How does Infosys sustain its growth and diversification strategies along with
employee satisfaction?
OPTIONS
1. Communication should be effective in all the levels of the organization. Infosys
should work to reduce the communication barriers so that employees at every
level can get a clear picture of the management's policies and programs
2. Employees need to be motivated for the work they do. Infosys should come
with monetary and non-monetary employee recognition programs to reward
the work done by the employees
3. Remuneration policy should be clear and simple; there must be some
correlation between the fixed and variable component of the pay
4. Infosys should come up with an informal kind of environment for work,
sometimes too much hierarchy diminishes the efficiency of the employee and
adversely affects the employee’s satisfaction
5. Teams, sometimes, play an emotional connects and act like the second family
for the employees, so it's very important to generate team spirit by rewarding
the overall team for good performance. Merit based promotions based on
sole as well as team performance can be introduced.
EVALUATION CRITERIA
 Company Performance: The performance of the company is of the utmost

importance to the management of the company. The options considered for
the purpose should affect the financial, market and shareholder value
performance in the positive way.
 Employee Satisfaction: A satisfied employee is motivated to work an extra
mile towards goal achievement. So, the option implemented should increase
the satisfaction level of the employee, which in turn will help in better
productivity.
 Work Efficiency: Work efficiency is the time taken by a team to complete a
given a task. Lesser the time taken, better the efficiency. So, the options
implemented should motivate the employee to work with better efficiency,
which in turn will increase the company’s profitability.
 Cost to the company: It is the cost incurred by the company for implementing
any policy or the options considered above. So, the company should go along
with the option which decreases the cost to the company and increase the
profitability.
EVALUATING THE OPTIONS

 If the management focuses on better communication among themselves and
with the employee, this would make things clear to the employee and they
would believe that their views are also considered in taking certain decisions.
This would in turn increase employee satisfaction, increase the working
efficiency and improve company’s performance. As all the criteria seem to be
fulfilled in this option, this seems to be the best option to implement
 If the management takes up the employee recognition program, it would
score on employee satisfaction, working efficiency and company performance
but loose on cost to the company criteria, as providing the employees with
bonuses and goodies will add to the cost in the company’s balance sheet.
 Clear remuneration policy will remove any dilemma in the mind of the
employee but would not guarantee employee satisfaction, better efficiency
and improvement in the company’s performance
 If the management goes forward with the option of providing better
recreational or informal culture, it would increase employee satisfaction,
increase efficiency and improve company’s performance, but will increase the
cost to the company and decrease its profitability
 If the management comes up with a promotion policy that is based on
performance of the individual and the group. In a way it is a good policy, but
performance being a subjective criteria may result in better efficiency and
improvement in the company’s performance but may not guarantee
employee satisfaction
RECOMMENDATION
After analyzing all the options based on the evaluation criteria, Option 1 - “Effective
communication at all levels of the organization” is the best available option for the
current situation. The company’s performance and employee satisfaction will
increase, execution challenges will decrease, and there is negligible cost to the
company for implementing this option. The feasibility of this option is very high and
can be implemented with very less time. Employees thought that the organization
was more impersonal and that some of the perks of the initial years were being
repealed. This recommendation will change the employees’ perspective towards the
organization.
ACTION PLAN AND IMPLEMENTATION

Involving the senior and middle level managers in the meetings with HR and properly
communicating the rationale behind the policies will reduce the confusion created by
these rapidly changing HR policies. This will make managers aware of the changes.
Then the Senior and middle level managers can effectively communicate these
changes effectively to employees. Thus, the scrutiny from employees, rumors, and
misinformation will also be reduced and trust will be developed among employees.

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This case is about the human

resource management at Infosys

We thank you for the opportunity to participate in the process.

6. Evaluating the options

8. Action plan and implementation

 Company Performance: The performance of the company is of the utmost

EVALUATING THE OPTIONS

ACTION PLAN AND IMPLEMENTATION

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