HR Case Study

Presented by – Group 3 – GmP6

Evolution of Infosys – A Remarkable Journey from 1980 - 1990

• Infosys was conceived in 1981 in Pune by Narayan Murthy,

Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D
Shibulal, K Dinesh and Ashok Arora
• Started with Capital of $250
• 1st Employee was N S Raghavan and N R Murthy was 4th
Employee
• The Vision of Founders is “creating wealth in a legal and ethical
manner”
• They wanted to create a company “of the professional, by the
professional, and for the professional”
• By 1986 Infosys had only one client due to restrictions from
Indian Government & US visa restrictions in 1989
• Except N R Murthy, all the Co founders were lost their hope and
decided to sell or dissolve the company wherein NRM was still
hoping that they were going to succeeded
• It took 1 year with 15 visits to Delhi to get permission from
government to import computer & 1-year time to get telephone
line
Evolution of Infosys – A Remarkable Journey from 1991 - 2000

• 1991 – Economic Liberalization helps software industry to travel and open

offices abroad, and to hire foreign consultants.
• Current account convertibility and 100% ownership of high-technology
companies was allowed.
• 1993 – Goes for IPO with employee count of 400+
• Transformation in the business from “body shopping” to offshore development
centers (ODCs)
• Introducing Global Delivery Model ( GDM) which divided projects into
components to be executed independently and concurrently, both at the client
site and at remote development centers
• 1994 – Moves the corporate HQ to Bengaluru ( Bangalore) and Development
center at Fremont, with employee count of 600+
• 1995 – Opens 1st office in UK Global Development Centre in Mangalore &
Toronto with employee count of 900+
• 1996 – The Infosys Foundation is established with employee count of 1000+
• 1997 - Assessed at CMM Level 4 with employee count of 1700+
• 1999 - $ 100M & Listed in NASDAQ with employee count of 3000+
- 21st Company in the world to achieve a CMM Level 5 Certification
- Opens offices in Germany, Sweden , Belgium, Australia and 2 DC in US
- was growing at a rapid rate, having doubled in size every 20 months
• 2000- $ 200M Revenue with 5000+ Employees strength
Evolution of Infosys – A Remarkable Journey from 2001- 2002

• 2001- Double the revenue to $ 400M with 9000+ employees count

• The U.S. government severely reduced the number of visas issued for
business purposes (from 195,000 in 1998 to 65,000 in 2004)
• 2001 & 2002 - Rated as best employer by Business World / Hewitt
• 2002 - $500 M revenue with employee count of 10,000+
• Nandan Nilekani as takeover as CEO and NRM has appointed as
Chairman & Chief Mentor
• Launched Progeon as BPO center
• New CEO Statement “ From being a Bangalore company to an Indian
company with a Bangalore base. Today, we are moving from being
an Indian company with global reach to a global company
headquartered in India.”
• 2003- Employee count has been increased to 15,000+
 External environment of Infosys for 1991 – 2000

• 1991 – Economic crisis due to BoP , fiscal deficits, High Inflation, low
Foreign reserves
• License Raj helps and allow IT companies to open offices at foreign
countries and to hire forging consultants
• Current account convertibility and 100% ownership of high-
technology companies was allowed
• Government-dictated pricing of new equity securities was eliminated
and in 1993 that helps to enter in IPO
• 1994 – Opens the first forging country Fremont
• 1995 – Opens offices first UK office, GDC at Toronto
• 1997 – Opens offices in Toronto & Canada
• 1999- Opens offices in Germany, Sweden, Belgium , Australia, 2 DCs
in US
• US Government Visa Issues which was made Infosys to change in
their business strategy of executing projects at the client site and at
remote development centers
 Internal culture and processes of Infosys

• 1992 to 2002 – Grown from 250 employees to 15,000 employees

• Infosys had always recognized that its employees, as “Infoscions”
• 1993 – ESOP – Employee stock options Program and became one of
the 1st Indian Companies to grant stock to the employees
• Secured No. 1 Best Employer in both 2001 & 2002
• 2003, Infosys toppled from the Best Employer List in the same
Business Today
• The founders wanted to build a company that “was professionally
owned and professionally managed, with good corporate
governance, good employee management, and good ethics.
 Moving Up the IT Value Chain

• Transform from Traditional IT Services like Implementation,

Managing & support to moving IT strategy and IT design.
• Moving from lower end of the IT value chain to higher-end value-
added services
• This shift meant that Infosys’s competitive set moved from IT
outsourcing firms such as TCS and Wipro in India or Keane and EDS
in the U.S., to bigger firms like Accenture and IBM
• Infosys is trying to get into consulting and end-to-end solutions as
per client’s expectation
• Competitors companies IBM & Accenture were offerings value
added services & E2E solutions in presence of limited Geographic
• Strongly adoption offshore working model with competitive cost
 Improving Brand Equity

• Infosys intent to create a Brand Equity “these Indians, they build

extraordinary software” and most peripheral person must feel the
impact
• Continuously differentiate from all our competitors to retain their
position
• “Change the Field or Change the rule of the Game “
• Employee salaries were in the top 10%–15% of salaries offered by
companies in its peer group.
• Value Added to Employees
• Learning value add through training
• Emotional value-add through the work environment,
• Financial value-add through compensation and benefits.
 Support System in Human Resource Development

• Mutual Commitment from Employer to Employee Vice versa

• There are option for informal way to address the employee's issues
beside the formal Grievance Resolution mechanism
• Providing support during emergencies period
• Create an effective Health Platform like HALE (Health Assessment and
Lifestyle Enrichment)
• Enabling an employee to pursue areas of interest by creating hobby,
cultural, and sports clubs, which organize events every week
• The average employee age at Infosys was a mere 26 years
• Infosys HR focused on facilitating a sense of fun in the workplace through
events like DJ nights, quizzes, intellectual debates, and dances
• Volunteering programs like providing outreach to street children and
support to old age home
• Introducing two type of Induction programs for Freshers & Experience
employees
 Challenge in Human Resource Development

• ESOP
• Employee stock options allows employees to purchase price of
5% of the fair market value
• The next generation employees also had similar expectation
wherein SEBI directed Infosys to issue future ESOPs at 85% of
fair market price which was big disappointment to the
employees
• Repeated Projects causing issues like deprived of the creative and
technical ingenuity that had been inherent in their work during the
initial years
• Employees thought the organization was becoming more impersonal
and that some of the perks of the initial years were being repealed.
• C-LIFE”: Customer delight, Leadership by example, Integrity &
Transparency, Fairness, and Pursuit of Excellence
 Challenge in Human Resource Development

• The diversity and disparity of the employee hierarchy was becoming

more apparent.
• Middle managers and senior managers were not in touch with the
rapidly changing realities of employees at lower levels
• Growing multinational technology firms into India attracted talent
from Infosys and Wipro because of their global brand and better
compensation packages
• Client expectations are high due to the massive growth of the
company and had to train the employees
• Processes
• Newer technologies
• Quality issues
• Customer interaction skills in order to ensure standardized
output to clients.
• Limited Onsite opportunities due to US Visa restrictions
• Variable pay option created a mixed reaction among employees
Changes After Year 2000

• Doubled in size every 20 months and becoming small large company

• Decided to implement some serious changes including
• Portfolio of core companies
• Services and reorienting the way people were measured,
compensated, promoted, and rewarded.
• Infosys subsidiaries clearly had cultural and compensation
disparities.
• Managing these differences and employee expectations across
subsidiaries was a new challenge for Infosys
• Variable Pay
• Until 2001, applied only for Senior Management who is 2% of
the population
• After 2001 March, variable pay was introduced based on company
performance, unit performance, and individual performance.
• Helped reinforce the company’s high-performance work ethic
 Changes After Year 2000 & Challenges

• Created 7 bands by demolishing 15 layers which helped

• Employee would know exactly what his/her role
• Broad-banding created an equitable framework for people-
related decision-making
• Broad-banding was the tipping point at which employee
dissatisfaction and discontent at Infosys reached its peak
• Infosys had always linked promotions to parameters such as
individual performance and seniority
• The revised promotions depended on three factors: individual
performance, the individual’s abilities to fulfill the next role, and (a
new addition) the existence or need of that opening within the
organization.
• Major issue is managing employees' expectations and
Communication due to large size of the company
• HR team were looking for major break through to change the
employee mindset and bring back the original culture.