Name: Vinayak Bhomkar

Roll No: E2009055

Subject: Human Resource Management
Topic: Infosys (A) Strategic Human Resource Management

Q. What should Hema Ravichandar do to recapture the heart of

Infoscian?

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

Strategic Human Resource Management

Strategic HRM defines the organization’s intentions and plans on how its business goals
should be achieved through people. It is based on three propositions: first, that human
capital is a major source of competitive advantage; second, that it is people who
implement the strategic plan; and, third, that a systematic approach should be adopted
to defining where the organization wants to go and how it should get there. Strategic
HRM is a process that involves the use of overarching approaches to the development
of HR strategies, which are integrated vertically with the business strategy and
horizontally with one another. These strategies define intentions and plans related to
overall organizational considerations, such as organizational effectiveness, and to more
specific aspects of people management, such as resourcing, learning and development,
reward and employee relations. Strategic HRM addresses broad organizational issues
relating to changes in structure and culture, organizational effectiveness and
performance, matching resources to future requirements, the development of
distinctive capabilities, knowledge management, and the management of change.

Case analysis
Before we could move to Hema Ravichandar’s question let us have a brief overview
about the case. Infosys which was founded on July 2, 1981 in Pune by N R Narayana
Murthy and seven others: Nandan Nilekani, N. S. Raghavan, Kris Gopalakrishnan, S. D.
Shibulal, K. Dinesh and Ashok Arora. With a small investment of Rs. 10,000 and
nurtured the organization to a world-class company currently valued at Rs. 50,000
crores ($10.75 billion). Infosys believes that leadership is one of the most essential
ingredients of organizational success which is provided by its Chairman, N R
Narayanmurthy. Leadership is based on high business vision and predominantly
supportive styles. Top management emphasizes on open door policy, continuous
sharing of information, takes inputs from employees in decision making, and builds
personal rapport with employees. As we have seen over last few years, we have seen
smooth transition from N R Narayanmurthy to Nandan Nilekani and from Nandan
Nilakeni to Kris Gopalkrishnan (2007) without any adverse effects on the company
outlook and each one has proved to be an able leader taking company forward.
Since Infosys is in knowledge-based industry, it focuses on the quality of the
human resources. Out of total personnel, about 90 per cent are engineers. At the entry
level, it emphasizes on selecting candidates who find the company’s meritocratic
culture satisfying, superior academic records, technical skills, and high level of learn
ability. The company emphasizes on training and development of its employees on
continuous basis and spends about 2.65 per cent of its revenues on up gradation of
employees‟ skills, and around 50% as employee costs. In spite of thousands of people
joining every month, Infosys has been able to maintain its training standard mostly due
to its highly matured processes capabilities and investment in infrastructure.

In 1999, Infosys was growing at a very rapid rate and doubling in size after every 20
months. Its management realized that a large small company till now, Infosys was well
on its way to becoming a small large company. Until March 2001, the concept of
variable pay applied only to Infosys senior management which constituted 2% of the
Infosys population and 10-15% whose compensation derived from an individual-
performance based component.

Introduction of Broad-banding pay structure

This concept actually collapsed 15 layers into 7 bands and was the prime reason for the
employee dissatisfaction and discontent reached to its peak. Rapid changing HR
policies bred confusion amongst the employees in project teams and managers alike.
Middle and senior managers were made responsible by HR for communicating these
changes effectively to employees; but some were unsure of certain aspects of the
change and could not face the scrutiny of employees.

Coming back to Hema Ravichandar’s question, yes, she will be able to keep the heart of
the Infoscions. Firstly, she needs to prepare a questionnaire in order to understand the
actual problems the Infoscion are facing. Yes, there is a feeling of inequity as the
company size is increasing rapidly. From March 2000 to March 2003 Infosys increased
their work force by 80%. Some of the factors she can use to get Infoscions back on
track:

• High involvement in the management

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

• Maintain the employee equity

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

The emotional bonding has worked pretty well for the Infosys but it is very important to
eliminate the drawbacks associated with that. They should try encouraging the
employee to be more creative so that they can help in improving the process
associated with the development of software. It is very important that an organisation
should acknowledge the innovations as this would help to enhance moral, motivate
performance and celebrate initiative or it will help them to improve better. Their active
participation ensures that innovation doesn’t go through frustrating cycles of fits and
starts. Rewards and recognition play a critical role in energizing them. It is very
important that we recognise employee effectively so that we can reinforce them. This
could be done in monetary and non-monetary terms.
Managing scale and attrition risk: Infosys started with 7 people but as the time
progressed, it expanded to 15000 employees (March 2003). It became difficult for the
middle level and senior managers to be in touch with the lower level employees and so
they were unable to understand the frustrations of the employees. There should define
a proper strategy in order to tackle the issue. Possibly we can increase the HR team to
understand employees. Their problems associated with the work or some kind of
feedback mechanism needs to be introduced against the top level managers.

The immigration issues needs to be properly resolved as this was Infosys dominant
levers of motivation exercised by senior managers to reward high performers. The
employee working for US clients needs to be properly updated with the government
policies of the visa restrictions.

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