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NS Ramnath
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Today in Tech | Infosys: Does HR Matter; Welcome to Twitch & More

Infosys: Does HR Matter?
Just before the financial crisis, the top management in Infosys was busy designing a system that would address several issues related to how it managed employees. It was called ‘Infosys Role and Career Enhancement’, a boring corporate term that shortened to a more exciting ‘iRace’. The idea behind iRace was to make sure its employees got a good grounding in technical skills – no one was to get a people management role before putting in eight years of technical work; it was to empower its employees – the ratio among technical leads, technical analysts and engineers expanded to 1:3:9 from 1:2:4 or 5 earlier; and more importantly the idea was to reward its best performers better by narrowing the circle of high performers. When it was launched the managers were happy, and some observers thought it would be a game changer for Infosys.

Things didn’t exactly turn out that way. In a culture (not just within Infosys, but in the industry as a whole) where career growth means ‘becoming a manager’ (unlike in US, where engineers could grow in technical stream close to the top) many employees felt they were being held back by the eight year rule; the new, flatter organisation left more employees unhappy with their ‘demotions’ than the employees who were happy with their wider span of control; and narrowing the circle of high performers got pretty much the same response as Indian government’s attempt to narrow down the number of poor people.

Some Industry insiders I spoke to at that time considered iRace a failure, and they pointed out to a rise in attrition rates following its implementation. But, a couple of them said in calling iRace a failure, we might be confusing correlation with causation. iRace simply happened at a time when Infosys was going through a rough patch. Employee dissatisfaction and attrition were a result of its poor performance in the IT services market, and not a result of iRace. (In fact, the causation, according to some studies run the other way – poor organisational performance leads to unhappy employees.) We will never know.

These explanations are worth keeping in mind while we read today’s story in ET which talks about Infosys rewarding its top performers further than it used to earlier. It’s important because it underlines the limitations of HR initiatives – even when it involves something as tangible as money – when the overall performance is sluggish. Even if this works well, it will be a stretch to tie this to Infy’s topline growth (which is its core problem).

In other words, we have to look for initiatives that address the core problem of Infosys – the performance of its ‘business operations’ segment (which includes application development & maintenance, infrastructure management services, testing and BPO). That’s the crucial part, and is probably tougher than rewarding top performers with more money.

 

 

Tech Mahindra – Mahindra Satyam is now Tech Mahindra: Welcome to the TWITCH
Five years back, the names of the top five IT Services companies lent themselves to an acronym (for which IT executives seem to have a fascination for. Refer to iRace above). Satyam, Wipro, Infosys, TCS, Cognizant and HCL Technologies were collectively called Switch companies. After Ramalinga Raju made his infamous confession and it became clear that Satyam’s numbers were inflated, there were jokes that Switch has now become witch. Today, Tech Mahindra announced that it has formally amalgamated Mahindra Satyam with itself. It will be called Tech Mahindra. The combined entity – with $ 2.7 billion in revenues and 84,000 employees – is large enough to break into top five. I am not too sure if the IT players will relish calling themselves Twitch. After all, they can do well without ‘short, sudden jerking or convulsive movements’.

 

 

Also of interest
The Big Fight: Details emerge on $5.2 billion loan for Icahn’s Dell bid | Reuters
The Age of Frenemies: Microsoft Joins Oracle in Cloud-Computing, Rivalry Thaws | Bloomberg
It’s closer than you think: Spate of Cyberattacks Points to Inside India | WSJ

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been associated with this company for more than 1.5 decades. It is not a happy feeling to read these statements but, there comes a point where denying something will not solve the problem Infy has reached that point, people like us have good memories of the company and that is one reason why many are still working for this organization and trying to make it work, sort of giving back. Yet, most of us deep down know the game is close to getting over, some of us will stick for few more years others will move on. On a personal level I have given myself 2 years time to do my best for this company and then maybe will move on. What company has lost is employee morale, lack of technical skills, below par middle management. Lets hope this great company makes a comeback because we all want it to.
Infosys culture is one of the worst in the industry. Extremely bureaucratic. iRace was a disaster! What's now left in the company is all junk...
how much did they pay to quash the visa issue which was genuine?
iRace: Infosys way of modeling itself on lines of Accenture and pioneered by then HR head and blindly supported by known Ex- Board member who was very vocal about failure of Infosys 3.0. Today it is evident that Infosys 3.0 has been failure due to events unprecedented in history of this company. Infosys 2.0 failure resulted in 3.0 as what we see now. The basics of all organization is it's employees, be it senior or junior or founders and if an organization is not able to empower and energies it employees (acronym as EEE as fascination for short forms), it is sure to go Infy way. Having said that let us hope for best and think that world is flat or world is sphere or world is hyperbole in 4th Dimension, the only thing it matters if you are able to connect employees with your dots. iRace tried create differentiators when actually the only differentiators are your employees, which is self contrary and funny because of psyche of employees in Indian IT landscape . Employees can be managed only by empowering and energizing them, this was reason why Infy 1.0 grew and this was reason Infy 2.0 & Infy 3.0 was failure. Let us hope that Infy 4.0 is based on values of Employee engagement else we all know what happens when HR head thinks herself/himself as business person.
Loved reading it. As such large proportion of resignations were due to iRace.
 
 
NS Ramnath
I have been with Forbes India since August 2008. I like writing about ideas, events and people at the intersection of business, society and technology. Prior, I was with Economic Times. I am based in Bangalore. Email: ns.ramnath@gmail.com
 
 
 
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October 05, 2013 08:14 am by itveteran
been associated with this company for more than 1.5 decades. It is not a happy feeling to read these statements but, there comes a point where denying something will not solve the problem Infy has reached that point, people like us have good memories of the company and that is one reason why many a...
July 23, 2013 15:01 pm by Bela
Infosys culture is one of the worst in the industry. Extremely bureaucratic. iRace was a disaster! What's now left in the company is all junk...
July 01, 2013 02:08 am by pai
how much did they pay to quash the visa issue which was genuine?
June 30, 2013 23:11 pm by Vikash
iRace: Infosys way of modeling itself on lines of Accenture and pioneered by then HR head and blindly supported by known Ex- Board member who was very vocal about failure of Infosys 3.0. Today it is evident that Infosys 3.0 has been failure due to events unprecedented in history of this company. ...
June 26, 2013 13:51 pm by Rahul
Loved reading it. As such large proportion of resignations were due to iRace.
 
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