Infosys

Introduction Infosys is a software company based out of India. It had a humble beginning in 1981, but by March 2003, revenues of Infosys had jumped to $754 million. As Infosys grew, it added employees at an impressive rate, from 410 employees in March 1993 to over 15,300 employees in March 2003. With the company’s rapid growth and its number of employees skyrocketing, the disparity of expectations across the employee hierarchy became very complex and employee discontent rose (Delong, 2006). This paper attempts to analyze the human resource at Infosys in relation to its effectiveness on organizational success. Definition According to Mello (2010), strategic human resource differs radically from traditional human resource in a number of ways. In a traditional approach to human resource, the main responsibility for people management programs rests with staff specialists in the corporate human resource division. A strategic approach places the responsibility for management people with the individuals most in contact with them: their respective line managers. Traditional human resource focuses its activities on employee relations, ensuring that employees are motivated and productive and that the organization is in compliance with all necessary employment laws. A strategic approach shifts the focus to partnerships with internal and external constituent groups. Critical partners in the process include employees, customers, stockholders/owners, regulatory agencies, and public interest groups. Traditional human resource assumes a role of handling transactions as they arise. Strategic human resource is much more transformational in assisting the organization in identifying and meeting the larger challenges it faces in its external environment by ensuring that the internal mechanism that facilitate change are in place. History and Issues Infosys was founded in 1981 by Narayana Murthy and six other colleagues. The company was created “of the professional, by the professional, and for the professional.” By 1986 Infosys had just one client. In 1989, the U.S. government placed new restrictions on the number of B1 visas issued each year, worsen the prospect of survival of Infosys. In 1991, the Indian government launched a program of economic liberalization that significantly opened up the Indian economy. The software industry benefited in numerous ways. Government-dictated pricing of new equity securities was eliminated and in 1993, Infosys tapped the Indian capital markets for its Initial Public Offering (IPO). Infosys started by focused on the lower-end of the Information Technology (IT) value chain. Over time Infosys moved toward providing higher-end value-added services including, IT strategy and IT design. On March 11, 1999, Infosys became the first Indian company to list on the National Association of Securities Dealers Automated Quotations (NASDAQ). From the time Infosys was founded in 1981, it had always tried to be the company with the Best Employer or Employer of Choice for potential employees. With potentially fatal threat from competition of multinationals for talents, Infosys’ management addressed the compensation challenge by ensuring that its employee salaries were higher than salaries offered by its competitors. In a major departure from the practices of other Indian companies, Infosys began issuing stock option to its employees, as well as moving to larger location with state-of-the-art technology facilities. Infosys recognized that employees would only be as committed to the company as the company was committed to its employees, and it attempted to demonstrate its own commitment in a number of ways. Infosys had its doors open informally besides having a formal Grievance Resolution mechanism; it provided a lot of support during emergencies; it created a very effective health platform; and it tried to make workplace more fun and meaningful through events like DJ nights and dances. Despite Infosys’ efforts, it faced challenges resulting from continuing growth. With each passing year, employee discontent rose as the diversity and the disparity of expectations across the employee hierarchy became more apparent. Additionally, there were two other troubling factors due to the company’s growing size: (1) As Infosys became more process-oriented and started leveraging its experience, employees were deprived of the creative and technical ingenuity. (2) Employees felt the company became more impersonal. Strategic Human Resource Management Analysis The key investments in traditional human resource are capital and products, while in strategic human resource are people and knowledge. Since Infosys is in knowledge-based industry, it focuses on the quality of the human resources. 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 to ensure standardized output to clients. Infosys adopted a client-focused strategy to achieve growth. Rather than focusing on numerous small organizations, it focuses on limited number of large organizations throughout the world to provide them with higher-end value-added services like IBM and Accenture. Infosys continues trying to improve its brand equity by getting into consulting and end-to-end solutions. Murthy had hoped the Infosys’ brand equity could be compared to automobiles built by the Japanese and had taking a number of initiatives to accomplish that goal, such as the first Indian company to list on the NASDAQ. Infosys plans to establish new sales and marketing offices, representative offices and global development centers to expand its geographical reach. It identified China as a development base and potential market for Infosys services that resulted in the establishment of a Greater China office. In its quest to provide end-to-end solutions, Infosys set up a Business Process Outsourcing (BPO) subsidiary called Progeon. Motivated by its near-death experience to re-examine its strategy, Infosys became one of the leaders among Indian companies to refocus its work from onsite to offshore development centers. To instill confidence in clients, Infosys became more quality and process-focused in its approach to software development. Also, to overcome the U.S. government’s VISA restrictions, Infosys developed a system of project management known as the 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. Values are important part of Infosys’ organizational culture. Infosys articulated the core values it believed in and wanted every employee to adhere to C-LIFE: Customer delight, Leadership by example, Integrity & Transparency, Fairness, and Pursuit of Excellence. The company has also adopted a free form organization devoid of hierarchies. Everyone is known as associates irrespective of his position in the company. Software development is undertaken through teams and the principle of flexibility. A member, who might have been team leader in one project, may be replaced by another member of the same team for another project. This system not only helps in creating the feeling of equality but also helps in developing project leaders. Conclusion Mello says, in his book Strategic Human Resource Management, that “traditional human resource grew out of principles of scientific management and job specialization to increase employee efficiency (2010, pp 163).” A strategic approach to human resource allows very broad job design, emphasizing flexibility and a need to respond as change takes place in the external environment. Specialization is replaced by cross-training, and independent tasks are replaced by teams and groups. For that, Infosys is a definitive example of successful strategic human resource management. Infosys had move “from being a Bangalore company to an Indian company with a Bangalore base, and today it is moving from being an Indian company with global reach to a global company headquartered in India.” However, as the company continues its impressive growth, it stays true to its “small-company feel and collegial environment, where processes and policies are flexible and customized to individual needs.” It tries to maintain the founder’s vision of the “Best Employer or the Employer of Choice” for potential employees through Strategic Human Resource Management. References Jeffrey A. Mellow (2010). Strategic Human Resource Management. South-Western Cengage Learning. Chapter 4, pp 156-171. Thomas J. Delong (October 16, 2006). Infosys (A): Strategic Human Resource Management. Harvard Business School. Edward E. Lawler III and Susan A. Mohrman (January 2003). HR As A Strategic Partner: What Does It Take To Make It Happen' Center for Effective Organizations. Marshall School of Business. University of Southern California.