.

Infosys iRace : what went wrong?

iRace – Infosys’ new employee development plan

Authors
Ankush Gupta – G10068
Bhushan Vilas Kale – G10073
Lisa Mohapatra – G10085
Nikhil Uppal – G10092
Sushant Sudhir Joshi – G10114

11/19/2010
Three out of five authors of this case study have worked for Infosys in the past.
Around 30 % of students in the General Management Program at XLRI have been associated with
Infosys.
Every second out of six software engineers are associated with or have worked for Infosys in their past.

Infosys has changed the way the world looks at India. It has placed the Indian youth and talent at a
different platform altogether. One of the largest employers of the young budding talent of India, it has
become symbolic of India‟s IT growth story.

Company Background
On its 30th anniversary, Infosys has been voted again the 'Most Admired Indian Company' in The Wall
Street Journal Asia 200 online poll. The company has achieved this distinction for nine years in a row.

Infosys Technologies Ltd. was started in 1981 by seven people with US$ 250. Today, it is global leader in
the "next generation" of IT and consulting with revenues of US$ 5.4 billion.

Infosys defines designs and delivers technology-enabled business solutions that help Global 2000
companies win in a Flat World. The offerings span business and technology consulting, application
services, systems integration, product engineering, custom software development, maintenance, re-
engineering, independent testing and validation services, IT infrastructure services and business process
outsourcing.

It has a global footprint with 63 offices and development centers in India, China, Australia, the Czech
Republic, Poland, the UK, Canada and Japan. Infosys and its subsidiaries have 122,468 employees as on
September 30, 2010.

iRace Initiative

Infosys Technologies launched its iRace (Infosys Role and Career Enhancement) program in June 2009,
an HR initiative aimed at career restructuring and better alignment of roles and responsibilities with
business needs employee aspirations.

Why iRace – Where was the problem?

Infosys has been with existing role based structure since 2003. During this period, headcount
increased almost by 1 lakh. Revenue also increased from $754 million to 4.6 billion.
Exhibit 1 gives the details about Infosys headcount and revenue change from 1996-2010
There was a growth in geographical terms as well; new development centers (DC) were built. Global
education center which is state of art training facility was built at Mysore. This growth brought its own set
of challenges with it. During this period approximately 50 thousand employees left the company and 1,5
lakh employees joined. Infosys was also growing outside the traditional IT business areas such as China,
Russia and South America etc. This was also the period during which IT business grew leaps and bounds
owing to economic growth, increased focus technology assistance, technology development and
innovation.
 With increasing growth, new opportunities came up very fast. Many new positions, roles came
into existence owing to new businesses and technologies. Maturing software development process also
contributed to this in its own way. As a result roles performed by people at similar position differed
across business units. Many new roles came into existence as a solution of some local business problems.

During the same period IT landscape changed at a very fast pace and various players in industry
expanded. Indian IT giants like TCS, Wipro and Infosys adopted own methodologies. Companies like
Satyam, Cognizant, and Tech Mahindra chose different path. India also became the destination for
various IT MNCs such as Accenture, IBM, HP. This collectively resulted in disparity at role,
responsibilities, capabilities and experience level not only among the Industry players but also within the
Infosys among various industry players.

Fast paced growth, client demands led to forced transitioning from technology oriented roles to
project management roles. Infosys was losing on its technology assets and it was observed that people
with little experience of 3.5 years moved to management roles. Employees complained that they did not
have opportunity to continue working on technology instead of moving to project management roles. This
resulted in shortened technology experience for many employees.

Recognizing the challenges Infosys chalked out the plan to take relook at the employee
development plan. Thus iRace – Infosys roles and career enhancement was developed. Here are few other
reasons that lead to the IRACE implementation:

1. Align the unique Infosys hierarchy with the Indian IT Industry standard.

2. Define the roles at various designations more elaborately to facilitate management and help the
employees understand their roles better.

3. Create a mapping of roles and designations across functions like Technology, Consulting,
Business Development and Account Management, so that employee movement across functions
with-in Infosys can be managed better.

4. Facilitate better evaluation of performance through improved role clarity and hence improve the
Performance Management system.

5. The job descriptions were defined as a group of tasks for a designation in a particular function.
The job descriptions were separately defined for each designation and did not provide much
clarity on the role played by the particular designation.

For example, a „Software Engineer‟s‟ Job description would include tasks like Analysis, Design,
Software programming, Software Testing and maintenance etc, but did not provide details of
whether the role played was in an engineering, managerial, quality assurance or consulting
capacity.
What is iRace?

The iRace program comprised of four parts. It started with first phase mapping of entire employee
strength followed by hiring and promotions based on the results of the mapping. The next phase was
defining of the role paths which provided an opportunity for the employees to choose between various
domains and departments. The last step in the process was performance management wherein employees
were rated for compensations and promotions based on their performance.
As part of iRace all the roles were consolidated together. Various role profiles were
compared across the business units and geographies. After thorough analysis of the roles and
responsibilities performed by people at different roles, new set of roles were created. These roles were
further had some sub roles as well. Along with this Infosys also decided to change it old band based
system in which person was having a job band and personal band. New set of “Job Levels” and “Personal
Levels” were created and mapped to new roles under iRace. These levels were further classified into
sublevels. New role named “Technology Lead” came into existence through this process.
Mapping somewhat looked as below:

Role Role Designation Job Level Job Sub Level Personal Level Personal Sub
Level
Senior Systems
3A 3A
Engineer
Systems
Systems Engineer 3 3B 3 3B
engineer
Systems Engineer
3B 3B
Trainee

Similar mapping was present for various roles

New roles were created for specific purpose and had definite eligibility criteria. Job description and
responsibilities were prepared for every sub role.
Competencies required to carry out particular job and shoulder the responsibility were clearly
identified. These competencies were further classified into Professional and Behavioural categories.
Performance measures for each role based on role were prepared.

Refer Exhibit 2 and Exhibit 3 for pre and post iRace hierarchy structure.

Performance Management Process

Following is a brief of the Performance management process which was followed by Infosys:

1. For a particular appraisal cycle, the appraiser creates tasks performed by appraise in the
Performance management tool.
 2. The form is sent to appraise where he puts in comments about his performance and provides a
self-rating for each task.

3. The appraiser then evaluates the performance based on his feedback and feedback from other
parties if needed.

4. The rating provided by the appraiser is signed-off by appraise.

5. Apart from this rating, each appraise is evaluated in comparison with his her peer group to form a
consolidated relative ranking.

6. The rating and the Consolidated Relative ranking decides the revised remuneration for appraise.

It can be observed that it is important to ensure the following to conduct the process mentioned above
effectively:

1. The tasks of appraise are defined according to the experience level, skill and the role played by
appraise.

2. Appraise is compared only with people performing similar roles and having the same skills and
experience levels.

The original system, as mentioned previously, was task based and objective evaluation was not possible
due to various issues such as subjectivity of tasks, lack of objective data capture. Moreover the system
was designed and created when Infosys was less than 20000 people. Scale added its own complexities
and challenges to system and existing PMS was not able to cope up with those. This made system very
subjective and vulnerable to personal biases and criteria. This was causing headache to various project
managers during the performance appraisals of appraise. These problems usually would travel upwards.
Problems used to delay the process eventually stretching the process thereby delaying rolling out grades
and salary increments. Many a times closure of one cycle and beginning of new cycle had very little time
interval.

Another issue in the system was its inability to capture the feedback, events or any recordable
mater dynamically. Person had to wait until the performance evaluation process to enter these detail in
system and by then its significance or weightage may come down. Common situation would be say, an
employee has solved one very critical software issue or found out a defect in software logic which is
existing since long time. This has resulted into customer delight and customer has communicated the
same to employee and/or his/her manager verbally. This exceptional performance needs to be recorded
somewhere as its importance would decay with time, and may not be even recognized as exceptional one
during the appraisal.

Changes in Performance management system

PMS was modified and goals were introduced instead of tasks. Capability and competency
parameters were introduced in the system and system was configured to capture the objective data. With
this new performance management system was built to evaluate the person based on goals achieved and
capabilities & competencies available with him. Now employee has to provide the data objectively
against each goal and has a matrix of evaluation associated with every goal. He/she also has to answer
more than 40 questions based on his/her role for the purpose of capability measurement.
Goal setting for the next cycle is done by employee and his/her manager during this process itself.
There was change in the appraisal process as well. Refer Exhibit 4 for new process flow.

Launch and communication of iRace and PMS

IRace anchor was identified for every business unit. Anchor along with senior people from
employee travelled to various locations and communicated the iRace philosophy to respective units in
person. Typical format of this communication was the speech address by identified person followed by
question answer session. Such sessions took place at every location including onsite covering each and
every individual employee. Though the intent was very clear, result was very disappointing as at most of
the places questions were not answered precisely. Role fitment exercise has resulted into mismatch at
some levels like existing project manager was classified as technology lead according to iRace criteria.
Many queries remained unanswered and especially boundary cases suffered due to lack of clarity about
their new roles.

New Roles Job levels and personal levels were communicated to employees individually through
e-mail. Many people were not happy with this due to following reasons:

1. Mismatch as discussed above

2. Boundary cases where person has missed next level by very short experience ( ranging from 1
day to 1 month )
3. Many employees had their next role changed delayed due to new criteria. E.g. in older system
person needed minimum 5.5 years of experience to be a Project Manager, iRace changed that
criteria to minimum 8 years of IT experience

New iRaced based PMS launched along with this in second half of 2008. This was a new system and even
managers had limited idea about this. This resulted into further confusion and chaos at appraisal level.
Though the new PMS launch was a soft launch, it attracted employee anger. (Soft launch system was
capable of performing appraisal with new features mentioned, but the existing process flow and task
method was followed). Goals were set and evaluated but not used for arriving at rating)
And the fact of the matter was that this was just appraisal as Infosys had decided not to give any
salary hike due to recession.

Post launch reactions and events

Our survey reflects that even after such clear job description and objectivity in the process, iRace
could not give the clarity to employees about their responsibility and roles. People continued to play
vague in the process and maintain the ambiguity in the role boundary. Above all this entire exercise
disturbed the entire organization. Employees expressed their feelings during the appraisal discussions,
various forums very explicitly. In fact iRace had become the discussion point of any meeting. Some
people have written and spoken about it very clearly on internal blog site and bulletin boards. iRace was a
hot discussion point everywhere in Infosys.
At the same time Ms Nandita Gurjar- SVP HRD, posted a blog on internal website which
criticized the employees. This was a flash point for employees and everyone including software engineers
to delivery managers posted their comments on blog criticizing iRace and Infosys pay policy. Blog
received more than 5000 comments in just one day.
Media also jumped onto this issue and had substantial news coverage about Infosys iRace. People
expressed their emotions freely on social networking platforms and blogs.

"iRace is a good thing to happen,but its
implementation was seriously flawed.
People expecting promotions were denied,
and people who did get their promotions
(expected) did not get the salary that they
would have got had they been promoted just
a year earlier.
The 'Adoption' stage was not thought of
clearly."
In these times of ever increasing competition in a
The change has dynamic business environment, for a fast growing
brought about more organization like Infosys it was imperative to have a
disappointments in career architecture program to be able to create a
the employed and differentiation for long term sustainability. It will help
the organization to create more value for the customers
attrition rate has
increased. in medium to long term.
iRACE was a large change management exercise with
an organization wide impact and like any other change
it was bound to see some resistance. However, the
implementation could have been smoother had the
communication been more effective in terms of
addressing the 'major' concerns of employees during
pre-roll out communications and more buy-ins created.

Management response and reactions

Later on management corrected the mismatch where most of the mismatch cases resolved with
people retaining their existing titles. Many boundary cases were identified and correction exercise was
carried out. A task force focusing on various aspects of employee development was formed. Each task
force had participation from all the levels. These task forces were assigned the tasks of evaluating systems
like Employee satisfaction, Performance management system, certification policies, CRR process etc.
Presentations were made to Infosys higher management (including some board members). Some of the
changes suggested were accepted and rolled out immediately where as some were noted for further action.
Group Analysis

After analyzing the case and survey results as a group has following observations

 Job descriptions were created however there was disconnect between the actual work and the job
description.
 New performance management system changes failed to connect the employee concerns even
though it empowered employees for objective assessment.

In addition to that iRace hit the road block on account of following issues

The timing
It was rolled out during the time of recession giving the impression to the employees that it is
being rolled out only to tighten employee benefits by downgrading roles and raising performance
benchmarks.

Proper buy-in
Proper buy-in had not been created - as a part of the role-mapping exercise based on no. of years
of experience; many employees were mapped into lower ranks. This created a lot of dissent among the
employees, especially during the time of recession.
Though iRace was successful in clearly defining roles and responsibilities across hierarchies, it
failed to improve the performance of the processes – performance management - for which it was
designed. Based on the feedback gathered, iRace scored very low on „Ease of Operation‟ and „Resource-
Role fitment‟. It changed employees‟ perception towards brand Infosys that was once known for its
benchmark processes and employee friendly policies across the industry
Exihibit 1
growth Growth Net Growth
Year employees % Revenue % Income %
1996 1172 30 27 47 7 72
1997 1705 45 40 49 9 27
1998 2605 53 68 73 13 60
1999 3766 45 121 77 30 119
2000 5389 43 203 68 61 102
2001 9831 82 414 103 132 115
2002 10738 9 545 32 164 25
2003 15356 48 754 38 195 18
2004 25674 61 1063 41 270 39
2005 36750 43 1592 50 419 55
2006 52715 43 2152 35 555 32
2007 72241 37 3000 44 850 53
2008 91187 26 4176 35 1155 36
2009 104850 15 4663 12 1281 11
2010 113796 NA NA NA NA NA

Exhibit 2

Project management sub stream roles – Post iRace

Job Job Sub

Role Role Description Level level
Delivery Head Delivery Head 8
Senior Delivery
Manager Senior Delivery Manager 7 7A
Delivery manager Delivery manager 7B
Business Manager Business Manager 6A
Group Project Manager Group Project Manager 6A
6
Project Manager Senior Project Manager 6A
Project Manager 6B
Technology lead Technology lead 5 5A
Technology Analyst Technology Analyst 4 4A
Systems Engineer Senior Systems Engineer 3A
Systems Engineer 3 3B
Systems Engineer Trainee 3B

*This is just a indicative structure and not the actual one.`

Exhibit 3

Project management sub stream roles – Pre iRace

Role Role Description Job Level

Vice Title Holder
Presidents(Business
Units Heads) Delivery Head
Delivery Manager Senior Delivery Manager E
Group Project Manager Group Project Manager Dx/ Dy
Senior Project Manager Senior Project Manager Dx/ Dy
Project Manager Project Manager D
Programmer Analyst Programmer Analyst C
Software Engineer Software Engineer B

*This is just a indicative structure and not the actual one.`

Exhibit 4

Old system process flow

Appraisee Appraiser Appraisee Reviewer

fills the form evaluates either accepts reviews the
and submits and sends to
to appraiser
and sends appraisal
reviewer or
back to sends back to and sends
appraiser appraiser to closure
with request
for re-
evaluation
New system process flow

Appraisee fills Appraiser Reviewer Appraisee

the form and evaluates and closes the
submits to
reviews the
forwards to form
appraiser
reviewer
appraisal
and sends
to closure
Exhibit 5
Survey Questionnaire

1 iRace has improved the clarity of job to be performed by you

2 iRace defines the responsibility of your role clearly
3 iRace has helped you in explaining expected role to the subordinates
4 iRace has improved resource allocation/staffing ( resource-role fitment )
5 New PMS ( iRace based ) is capable of collecting performance data and evaluating it objectively
6 iRace has helped in improving performance management process
New PMS ( iRace based ) is capable of capturing activities performed by you but not mentioned in
7 job description
New PMS ( iRace based ) is capable of capturing objective data to analyse the role and evaluate
8 capabilities ( role-capability fitment )
9 New PMS is easier to operate ( Enter and Analyse data )
10 objective of iRace inititive was explained to you before it's roll out

Survey Results

Total respondents 12