1. Infosys HR
Shortcomings
and Solutions
Strategic HR End term
paper
Anshuman Jaiswal G09051
XLRI GMP 2009-10 Page 1

2. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Table of Contents
Shortcomings of HR practices .................................................................................................... 2
Some Solutions from a strategic HR perspective. .................................................................... 5
Shortcomings of HR practices
Infosys is currently facing many challenges both internally and externally. On external
front, markets have been in downturn since last year and slowly markets are
rebounding. Clients have drastically reduced IT budgets and have become price
conscious at the same time, competition has intensified because of adoption of Global
delivery model by other companies and consolidation within industry (HP-EDS-Mphasis
combine), Dell – Perot Systems combine etc. One the other hand, employees have been
not given salary increases for last two years, morale had come down, and staff
reductions were done last year for the first time in history of Infosys.
Among the major HR challenges, Attrition has remained as a major challenge for
Infosys and its peers in the IT industry in India. Attrition level has hovered around 10-
14% during last wave of IT expansion.
Attrition
16
14
12
10
8
Attrition
6
4
2
0
2009 2008 2007 2006 2005
Page 2

3. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Attrition is one of performance measures of delivery heads. A high attrition is frowned
upon. Managing attrition has been a major challenge. Although because of recession,
the attrition rate has come down but it can go up anytime. In fact it has shot up to
13.4% in last Quarter ending 31st Mar 2010. Attrition happens because of various
reasons. For few of the causes, company cannot have any control but for some it can
tighten its belt to handle them better. For e.g. manager – subordinate relationship is
major driver in employees’ satisfaction and his/her association with the company. Most
of Infosys Project managers have technical background with less background in Business
or HR aspects. This gap is primarily filled by experiential learning and training programs
but in many cases mangers are found to be ill-equipped to handle employee relations,
line management functions and soft aspects of HR.
The attrition is also propounded by mismatch of building expectations. Employees’
performances have unfortunately built on wrong expectations such as Onsite Travel,
Relocation etc. In many cases it has been found that such expectations are wrongly built
without any alignment with business requirements. Since expectations are built in thin
air, they don’t translate into fulfillment of expectations and hence this leads to employee
dissatisfaction and ultimately into unfortunate attrition. Despite being one the best work
culture, learning environment, challenging assignments, employees’ leaving
organization has been primarily driven my mismanagement of expectations and lack of
HR capabilities of project managers.
In order to keep employee satisfied, managers dangle carrot of “Onsite opportunity” to
employees which is case for usage of wrong motivation. If employee is looking to
switch jobs, wants a location change, wants a technology, project, unit, domain change
or has got low performance appraisal ratings, and as manager you don’t want them to
leave, just promise them an onsite opportunity and things gets settled. This practice has
been used for years and organization has suffered great deal on this account. It has led
to employees using it as a bargaining tool and not focusing on real motivators such as
work satisfaction, learning, challenging work environment. Organization bleeds because
one doesn’t aspire to create new software or deliver fewer defects but aspire to a get
EURO or Dollar paying salary. Business unit heads push this even hard by running
tracking list ensuring people get chance in visa lottery without even considering impact
of such meaningless immigration push on employees of other nationalities of more than
75+ countries.
Page 3

4. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Among the challenges, career progression has come to bite to bite HR managers. In last
4-5 years, Infosys has added 25000+ people on a yearly basis. Since so many people
have joined at the same time, they get experienced and eligible to perform roles at next
level or become eligible for promotions. However, the positions for higher level reduce
significantly as we climb up the hierarchy ladder. How do we solve this challenge of
providing career progression to large number of employees at the same time without
causing any confrontation among employees at the same level?
With employee population whose average age is 26 years, lot of employees have found
their life partner within Infosys. Also there are many employees whose spouses have
taken transfer from other companies and joined the organization. Infosys has been very
generous in facilitating location preference of these couples and managers try best to
find assignment for couples in same location. The issue arises when managers put
customer requirements and other employee’s career chance etc at stake and push hard
in maintaining the couple at same location, same client location etc.
HR role especially BP_HR (Business partner HR role) is very important. Each IBU
(Integrated Business unit) has a delivery unit consisting of 250-300 people. On an
average a BP_HR, business partner HR is appointed to take care of business needs of the
unit. Typically these employees are MBA HR from premier BSchools. These HR people
have got such a limited canvass to operate that they end up organizing events and
doing secretarial jobs. The HR people don’t have strategic orientation and end up doing
non value add work; instead of adopting a proactively solving HR issues, they relegate
themselves to mundane things in unit and end up wasting their time and resources.
Among the strategic decisions that Infosys took last year Infosys was removal of 2100
employees from its rolls across ranks. The decision came as a surprise to employees as
no information was shared and nobody had any inkling of occurrence of such a thing.
The way people were handled shook everyone’s imagery of Infosys. A company which is
known for best HR policies in the country has taken such an extreme step. The whole
affair was handled in a secretive manner that it tattered all the transparency standards
upheld by the company. There is lot to learn from how not do such workforce
reductions and the way reductions have been done would have long lasting impact of
infosys brand image as most employee friendly organization.
Page 4

5. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Some Solutions from Strategic HR perspective.
The Current role of BP_HR has become more of admin role limiting the scope of potential of the
role and people performing that role can have on the organization. The more mundane and
generic role can be redesigned so that people performing that role become much more
effective and delivery the HR promise. The BP_HR role can be transformed from Admin kind of
role to Employee champion. This would mean shifting focus from Systems and Operations to
People and Operations. This translates into BP_HR role becoming independent of influence of
Line management and can focus on employee development activities and stretching the scope
work and execution. The BP_HR role plays an important role in shaping HR activities at the unit
level. The proposed shift means that BP HR has to play a more of knowledge intensive, people
oriented role. They should be directly responsible in executing the HR strategy at the unit level.
They should showcase personal credibility in delivering programs and policies effectively and
efficiently.
Strategic Focus
Strategic Partner Change Agent
Systems
People
Admin Expert Employee Champion
Current Proposed
Operational Focus
In order to evolve Infosys from this transition state (economy recovering, various HR
challenges listed above) to a stable state, HR needs perform proactive roles for both
strategic and operational reasons for driving the workforce to meet the challenges and
come out as winners.
Page 5

6. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Reactive Proactive
Strategic Need to function here
Operational Need to function here
Collaboration Commitment
High
Unique
ness Compliance Productivity
Low
Low Strategic Value High
Lepak and Snell Model
Infosys gets more worried when attrition becomes high in Quadrant1 as Knowledge
base employment leads to employees with High strategic value and uniqueness and
hence there should be clear distinction in terms that what kind of employment is good or
bad for the organization. Focus should be to protect attrition of people with whose
strategic value is high. Roles which are nearer to low uniqueness and low strategic value
can be contracted, this would lead to non inclusion of such attrition in Infosys count and
hence focus would get shifted to manage the attrition that needs to be managed. This
would obviously mean better training and orientation of Line managers. BP_HR will play
a crucial role in achieving this as they could play an instrumental role in guiding and
managing manager’s training programs and building interpersonal skills. The career
progression into a managerial role should be based on person’s capability to perform
the role and equal focus should be on technical as well as people skills. These skills
should be continually nurtured and manager should be objectively evaluated on how
they are performing on People skills. This exercise should be a separate activity apart
Page 6

7. XLRI GMP 2009-10 Anshuman Jaiswal G09051
from routine performance appraisals. Also, qualitative data on subordinates feedback of
their managers can be collected periodically and can also be structured to make it part
of performance appraisal. These measures would bring seriousness to the whole
exercise which will enable right people becoming managers and continuous capability
building in terms of handling people.
Designing Employee motivation tools in alignment with customer requirements is very
important issue which needs to be solved. There has to be clear and consistent
alignment in employee satisfaction and employee engagement. The motivation tools
should be built keeping consistency of customer requirements in mind. There should
not be any conflict in what customer wants and what employees want. Hence, all the
motivation tools including “Onsite Opportunity” needs to be reviewed to bring the
alignment. Also, clear communication within organization needs to be there which can
spread the message among managers and employees on goals and objectives of such
tools and their alignment with respect to customer requirements.
Coming to career progression, Infosys had undertaken huge exercise to redefine the
career and role architecture by completing iRace exercise. The objectives were manifold
and one of the objectives was to provide a solution to the flat hierarchy. The proposed
solution is to expand the levels from 7 to 10+. This has given scope to increase the
number of promotion opportunities. Also, provision for certain number of years in a
position has been made mandatory. For e.g. in order to become a project manager, one
has to perform in technical roles for at least 8 years. These measures have partially
solved the problem but unless organization grow rapidly or employees are in sync with
steady growth and its related consequences, the problems of employee demotivation
leading to attrition continue to plague HR department.
Hence, it is important that redesigning of work systems should be done leading to
strengthening of core job dimensions such as skill variety, task identity, task significance,
autonomy and feedback. Also key Psychological states such as meaningfulness of work,
experienced responsibility for outcomes of work and knowledge of actual results of
work is very important.
This necessitates requirement of HR to move from a traditional HR role to Strategic role.
HR should be treated as investment center investing in People and knowledge. Since
Page 7

8. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Infosys has grown to a huge company, it is important that broad, flexible role is
designed rather than creating silos. This might sound that everyone does everything
rather the idea is that employees are groomed to take a position that is somewhere in
middle of vertical and horizontal specialization.
Page 8