Infosys Technologies, a leading software company based in India, was voted the best employer

in the country in many HR surveys in the recent years. The company was well known for its
employee friendly HR practices. Though Infosys grew to become a US$ 2 billion company by
the year 2006, it still retained the culture of a small company. Infosys attracted the best talent
from across the world, and recruited candidates by conducting one of the toughest selection
process. All the selected candidates were required to go through an intensive 14 week training
program. All the employees were required to undergo training every year, and some of the
chosen employees were trained at the Infosys Leadership Institute to take on higher
responsibilities in the company.
Infosys was one of the first companies to offer ESOPs to its employees. The company followed variable compensation structure where the employees'
compensation depended on the performance of individual, the team and the company. The case highlights many such best practices of Infosys in
human resource management. It also discusses the challenges faced by the company to retain its talented workforce.

Best Employer in India

In November 2005, Infosys Technologies Ltd. (Infosys), based in Bangalore, India, was named
'The Best Company to Work for in India' by Business Today magazine in a survey conducted by
Business Today, HR consulting firm Mercer5, and international market research firm TNS6 . 

Infosys had been adjudged the 'Best Company to Work For' in 2001 and 2002 but had lost this
position in the next couple of years (Refer Exhibit I for the 'Best companies to work for in India'
from 2001-2006). In the 'Best Employer' survey conducted by Dataquest7-IDC8 in the year 2006,
Infosys was adjudged the 'Dream Company to Work for.'
Moreover, Infosys was also recognized globally and featured among the top 100 companies in Computerworld's 9 'Best Places to Work for in IT – 2006'.

For participating in this survey, the companies needed to have revenues of over US$ 250 million in 2005, and to employ 500 employees in the US.
Infosys also featured in the list in 2004 and 2005 (Refer Exhibit II for some of the honors/awards received by Infosys). 

On the company's HR practices, Nandan Nilekani (Nilekani), CEO, President and Managing Director of Infosys, commented, "It is about creating a
highly motivated workforce because this is not a factory where you can monitor the quantum of output at the end of the day. But in the intellectual
business you cannot do that. So, you have to create a motivated set of people who can operate.

Best Employer in India Contd...

Attracting the best and the brightest and creating a milieu where they operate at their highest
potential is very important. Our campus and technology infrastructure is world-class, we pay a
lot of attention to training and competency building, we try to have sophisticated appraisal
systems, we try to reward performance through variable pay. These are all part of the same
motive."10

Since the early 2000s, Infosys' operations had been growing rapidly across the world. The
number of employees in the company also increased four-fold to 44,658 in March 2006 as
compared to 10,738 in March 2001 (Refer Exhibit III for the number of employees in Infosys
between 1995 and 2006).
The company believed that its key assets were people and that it was important to bring its employees on par with the company's global competitors.
In spite of its rapid global expansion, Infosys retained the culture of a small company. According to Bikramjeet Maitra (Maitra), Head of Human
Resources, Infosys, "We like to maintain a smaller company touch and we have split the overall business into several smaller independent units of
around 4,000 people each."11
Excerpts

The HR Practices

Most of the HR practices of Infosys were a result of the vision of its founders and the culture that they had created over the years. The founders
advocated simplicity and maintained the culture of a small company. The employees were encouraged to share their learning experiences...

Recruitment

While recruiting new employees, Infosys took adequate care to identify the right candidates. On
the qualities that Infosys looked for in a candidate, Nilekani said, "We focus on recruiting
candidates who display a high degree of 'learnability.' By learnability we mean the ability to
derive generic knowledge from specific experiences and apply the same in new situations.

We also place significant importance on professional competence and academic excellence.

Other qualities we look for are analytical ability, teamwork and leadership potential,
communication and innovation skills, along with a practical and structured approach to problem
solving."

Training

Training at Infosys was an ongoing process. When new recruits from colleges joined Infosys, they were trained through fresher training courses. They
were trained then on new processes and technologies. As they reached the higher levels, they were trained on project management and later were
sent for management development programs, followed by leadership development programs...

Training New Recruits

Infosys conducted a 14.5 week technical training program for all new entrants. The company spent around Rs 200,000 per year on training each new
entrant. The new recruits were trained at the Global Education Center (GEC) in Mysore, which had world class training facilities and the capacity to
train more than 4500 employees at a time. GEC, which was inaugurated in February 2005 was spread over 270 acres and was the largest corporate
training center in the world with 58 training rooms and 183 faculty rooms...

Training Programs for Employees

Infosys also conducted training programs for experienced employees. The company had a competency system in place which took into account
individual performance, organizational priorities, and feedback from the clients...

Infosys Leadership Institute

The Infosys Leadership Institute (ILI) was set up in 2001 to nurture future leaders in the company and to effectively manage the exceptional growth
that the company was experiencing. At the Institute, the executives were groomed to handle the changes in the external and internal environment...

Performance Appraisal

The first step toward carrying out performance

appraisal at Infosys was the evaluation of personal
skills for the tasks assigned to an employee during
the period of appraisal. To evaluate the
performance, different criteria like timeliness,
quality of work carried out by the employee,
customer satisfaction, peer satisfaction, and
business potential, were considered. The personal
skills of the employees were also evaluated based
on their learning and analytical ability,
communication skills, decision making, change
management, and planning and organizing skills.
Each of these criteria was measured on a scale of
1 to 5 (with 1 signifying above the expected
performance level and 5 below the expected
performance level).

The Culture

Infosys tried to preserve the attributes of a small company and worked in small groups, with decision-making remaining with those who were
knowledgeable about particular processes. The managers played the role of mentors and used their experience to guide their team members...

The Challenges

With the IT industry growing at a rapid pace, Infosys planned to recruit around 25,000 people in the financial year 2006-07, in order to maintain its
growth. Though it had started hiring its workforce globally, it mainly recruited engineering graduates from India. If the industry continued to grow at a
similar pace, analysts opined that companies like Infosys would not be able to find enough people, especially with several multinationals entering India
and recruiting aggressively. To address this issue, Infosys started recruiting science graduates with a mathematics background to create an alternate
talent pool...