Critical Study of Human Resource Management (HRM) at Infosys technologies pvt
Infosys technologies is a leading outsourcing IT services multinational company having headquarter in Bengaluru, India and is having its branches and development centres in China, UK, Japan, Australia with a large workforce of 1,27,000 employees all over the world. They have a flat organizational structure HR structure directed by Nandita Gurjar with a few levels of management between software developers and managers, and thus the employees have more involvement in decision making. That is why, they have been rated best employer by business world/Hewitt.
They offer software development, business consulting, product engineering, maintenance, integration systems and validation services to the companies like Microsoft, SAP, Google, Yahoo, Oracle etc. They are 2nd largest software multinational company in India after TCS with an approximately revenue of US$ 5.7 billion in 2010 and employees a chunk of skilled employees. Infosys created a great global picture of software outsourcing of India all over the world because of which they attracted a large number of talented engineers across the world. There has been a burgeoning growth in the workforce in recent years,
Due to the interlinked and fantastic international HRM structure they were rated “Best companies to work for” by HAY group. Females contribute to more than 30% of their employees making them awarded by NASSCOM for gender empowerment. Their HRM have given importance to each employee and given a fantastic place in their company. Due to all this for last two decades they are attracting very talented engineers and software developers resulting in burgeoning growth of their organization. In recent time, they are getting big projects from big companies, for which they need skilful and talented employees. But in last four years they are dramatically facing the problem of attrition. A recent survey showed that in October-December quarter of 2010 there was 17.5% attrition, which is an alarming situation for them, that will affect their started projects massively. According to financial express, attrition has become a major trouble for them, and they need to solve it as soon as possible. The most striking point is the continuous increase in attrition rate in last 2 years, making it a big challenge to their HRM department. Interventions of solving this can be done by increasing compensation, training and feedback.
BRIEF HISTORY AND PROBLEM IN DETAIL
Infosys was founded in 1981 by N.R. Narayana murthy and six entrepreneurs with a very small capital of US$ 250, which was signed up with client Data Basics corporation in New York. And in same way in 1983, it relocated its corporate headquarters from Pune to Bengaluru. After that they, opened their branch in USA.Subsequently, in early 1990s they introduced modern human resource management program and got a certification of ISO-9001, which was a great achievement for them. Also in the same year there shares were shared with public sector. Also, they opened a development centre in Fremont, Las Vegas , USA which was a significant milestone for the company. They were accessed at CMM level 4 in 1997 that was their global success. They started enterprise solutions also called packaged application practice. In same year its one big division “Infosys business consulting services was launched. Next year they opened offices in France, Hongkong and other development centres in USA, UK and Canada. A big achievement in their HRM was achieved when they were rated best employer for 3 consecutive years. In 200-2002. They were accredited with many other organizations like “MAKE” because of their innovative HRM structure.
Its HR department made a massive increase in employees in next years. But after then it has been facing problem of attrition massively. The attrition rate is peaking to a hight rate in the early 2010, in this period the attrition was 13.4%. According to NASSCOM website, there is huge demand of IT professionals in the past few years, hence the demand is too high, so there is a big reason to worry about attrition recently.
With new and new projects coming up, the services need to be build up its skilful employee sale to meet the requirements. As the market is having more opportunities so either employees are leaving companies. During this quarter 7833 people left the organization that was like a backlash in the productivity. Usually in this quarter employees are started their MBA or MTECH degrees. About 90 left for higher education and 2215 left to join other companies. Company invest a huge amount on their training and in return they want certain required work, but surprisingly, they get the resignation letters from employees, which is a big loss for the company. Even their competitors like TCS and Wipro are also
facing attrition of 21.7% and 14.4% respectively in last quarter of 2010. Though the IT bell added 14,624 new employees in 2010 during the quarter but there was alarming exit of skilful 6,618 employees taking the total to 122,468 till September 30 2010 . Infosys wanted to g=hire about 10,000 more engineers in 2010 which has been highest record till now because of booming projects.Their HR head can put some strict and affective policies to reduce attrition.
INTERVENTION 1: INCREASING EMPLOYEE’S COMPENSATION
A very effective way to reduce the attrition is to increase their basic salary because most of the times, employee leave because of limited compensation and go to better paying companies. A perfect example is of HCL technologies which is a competitor of Infosys technologies also faced attrition of 30% in 2004.(Frauenheim A. , 2008). HCL’s leadership thus decided to focus on employees and followed A policy “goal of employee reforms by increasing transparency” made them understand that employee needed compensation and increments. So HCL decided to pay higher fixed salaries significantly to get valuable input from the employees. This policy was built to make trust in employees. Resulting in decline of attrition to 15% and their revenue jumped to 146% and production to US $ 1.9 billion in no time. Infosys today is as global as HCL, so they must follow the same way and increase compensation of employees. Their one more rival Satyam computer services pvt ltd was facing the problem of attrition in July 2006. (Market watch, 2007). So they increased the employee’s wages by 18% hence reduced attrition rate and they managed to meet their productivity. One more example is of Microsoft who also faced attrition of 9% in fiscal year 2004 that made the HR worried when they were losing mangers, engineers and marketers. Their director of platform evangelism left for internet phone Skype technologies, for a better salary and a long list of employees were moving to Google. The reason was compensation and profits. So there were Microsoft compensation moves that made a hike in their salaries. And they rated their employers by top performers and the pay scale was decided by high performer to average performer.” It creates competition in the ranks, when people really want community” said Microsoft vice president, and thus they were able to retain their talented employees. (Green, J. 2005) Similarly, Infosys can also divide the top performers and
average performers and hike their compensation accordingly which will create a competition to reach optimum targets to get better pay scale, resulting in self motivation. So by increasing compensation of employees will be a great way of reducing attrition.
Intervention 2: TRAINING OF EMPLOYEES
Training will make the employees comfortable with work and reduce their problems. Many times, employees are not able to adjust with their work and start losing the interest, in such cases they need a motivating and technical training. An article by Bob Harris says training an employee by building new ideas with learning experience to software developers will enhance confidence and loyalty in words (Harris, B. 2005). And thus training will impart a moral boost and build long term relationship with company and simultaneously competitive work.
With training, proper positioning of employees in their work will develop a harmonious relationship in organization resulting in reduction in attrition and retaining skilful employees. (Goldenkoff, R. 2007) As a trainer we can avoid unnecessarily frustrating the techies by giving them that task which they are not capable of. And because of new technology coming up there is need to train them with new methods of developing software with less time consuming and with less errors. A better approach during training should be adopted to put no communication gap between trainers and the trainees, they should be exhibited with all the skills they need in their work. (Peter, A. 1977).Training to be offered timely and feedback on it is necessary especially on new policy and techniques, their conflicts with supervisors should also be considered and then resolved by mutual understanding in proactive training. Training should have a dual affect of new skills and personal relationship with supervisors and managers. Motivation and encouraging toward the commitment toward work will create a sense of loyalty in the employee; as a result it will create a sense of responsibility and their own importance in their company.
INTERVENTION 3: SURVEYS AND FEEDBACKS
Significantly, employee’s feedback data can support exit data. Such as annual federal employee viewpoint survey that includes asking employees whether they are leaving the organization in next period and why (to know the reason). The responses of those who say they are considering to leave next year are-(1) they do not like the work, (2) they are not satisfied by reorganization they receive (3) they are not happy with the compensation.(Sitzmann, T 2010) Hence this will give a clear idea to the HR department about the exit reasons of their employees.
A research has shown that positive effects of prompting, self-regulation, minimizes the doubts of both management and employees. Using the method of prompting questions and reflective approach to the queries resulted in decrease of attrition and created confidence in employees. (Korrapati, R. 2010) The intervention of questioning and answers from employees moderated attrition. A questionnaire can be given to the employees asking for the response of their basic needs in work, interested work, incentives, promotions and working shifts. The basic design for the surveys can be alteration in person interviews with telephones and mail out surveys periodically. (Lavigna, B. 2011).This will give a brief idea of their unmet need which can be fulfilled and van be helpful in retaining them in organization
. Sometimes the employees are not happy with the manager, so the manager can be changed and instead of loosing employee. In some cases it is found that employees are not happy with workload and pressure, so the HR team can put more people on that work in order to equally distribute the work and put such kind of work that he can do. An article by national longitudinal survey says that by survey methodologies impact of attrition can be reduced. . If its I consistent with its objective, continuous rounds are there that totally consider each, the targeted incentive reasons data can be achieved, and finally longitudinal survey that convince and offer attention, making them confident that they are providing their study in a right way, and thus with all these attrition knowledge will be achieved helping in reducing attrition. (Randall, J. 2005) The HR will be retaining them for long term by meeting their needs. With the help of survey and feedback from them, It will eliminate all the unwanted shifts, and will lead to mutual co-ordination between management and organization, hence leading to satisfaction an reduction in attrition. If all these feedback are unbiased and done accurately, this will reveal all the pros and cons, bringing a clear picture of the organization
Overall, it is concluded that attrition is causing trouble for Infosys that is caused by unmet needs like overtime, stress; low fixed salary or low motivation in employees which can be solved by hike in compensation, feedback, surveys and training. We have to implement these way according to circumstance. Out of this feedback from employees is very essential that reveals the general idea to HRM, about the root of this problem which can be solved with discussion and meeting of these needs, such kind of responses will lead to future planning also and it will further reduce the future attrition. But, will it really solve the problemSometimes, the best surveys even do not work accordingly and employee still leaves the firm, so a proper planning has to be made during the feedback to get correct data and implement the solution carefully. Also, any confidential way of surveys and questionnaire should be implemented. Similarly the intervention of more compensation should be implemented in company. The better the work, the better he should be paid, because of the competitive world and new competitors, the HR have to visualize the correct pay scale for the employee when compared with similar talents and should not be biased.
Is it there any competition in employees regarding pay scaleHow employees can be motivated to get more incentives .These questions should be in consideration of HRM and will result in positive effects. While training, the real motive of retaining the employee for long term has to be considered. What questions have employees in their mindWill the training will be affected and will he be in company for more time after trainingAn effective and practical policy should be adopted which will work on this special project considering these, the HRM should go for training because if training does not solve the problem, what will be use of itAll these ways have to be followed by HR head Nandita Gurjar and monitor , the managers while doing so, if the ways are working they should continue in same way and if not they should be rebuild and closely monitored. Subsequntly, The HRM can make future planning also so that this problem will not occur and is the policies are periodically followed. Then only the HRM will be able to retain talented engineers in company for long term. Hence, through all these ways we can solve the serious problem of attrition in Infosys technologies which should be adopted by Hr department of Infosys technologies.
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