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| Illustration: Uday Deb |
The newspaper headlines suggest that the Infosys world has changed. “Is Infosys losing employee-friendly status?” “Infosys may have seen 4,000 staff exits in February.” “Infosys employees sceptical about new HR move.”
Infosys has enjoyed a spotless reputation all these years. Even when tax issues (relating to 1997-1999) made their way to the Supreme Court, everyone dismissed them as another IT department excess. The media didn’t bother. Today, reports with negative slants are appearing all over the place. Blogs are buzzing about the inequities of Infosys’ new HR policy.
What’s it all about? The issues stem from a programme called IRACE (Infosys Role and Career Enhancement). It comes with a lot of jargon. Says a report in a south India-based business daily: “(A) few months back the company introduced an HR initiative called IRACE. According to this initiative, employees will be mapped on the basis of positions, experience and skill levels. Previously, positions and promotions were often given randomly, depending on the employee’s skill in negotiating. After the introduction of this initiative, many employees have been demoted. An employee complained: ‘Designations are so important for everybody. And if the management found somebody good enough for a certain position earlier, how can they now say that he is not? What makes it worse is that all those affected were at lower levels. Nobody in the senior delivery manager and higher positions was affected.’”
What is not up for debate here is the need for IRACE and whether it is good or bad. That is something best left to the company itself. What is telling, however, is an admission by the top management that there are enough people available at all levels. Read between the lines and you will realise that Infosys may not have thought of this measure in better times.
The first issue here is one of timing. Such initiatives are conjured up only in times of crisis. IRACE was clearly a fruit of the global slowdown and the impact on technology spending. Everyone realised the need to tighten belts then. Today, when happy days are back for the technology brigade, IRACE looks archaic. The problem clearly is the time gap between visualisation and implementation.
The brass at Infosys has been harping on the fact that IRACE did not mean a decrease in remuneration. (Infosys is all set to hike compensation by 8-12 per cent this April.) What it does mean is slower promotions and, the worst part of it, demotions. No matter how you dress it up, this will be seen as a step backward on the corporate ladder. This will be regarded as a career black mark by both colleagues and potential employers. Many at Infosys may be taking pre-emptive action by jumping ship now.
“I have another issue here,” says Mumbai-based HR consultant D. Singh. “Has Infosys forgotten that salary is a hygiene factor which was booted out as relevant to employee satisfaction since the days of Frederick Herzberg?”
Where is IRACE making a difference? It is increasing dissatisfaction levels in the company. It is impacting the image of Infosys. Others have lost out on image before. Consider the corporate heroes of yesterday — Hindustan Lever, Tata Steel — they are no longer automatic choices for the Most-Respected list. “The image of a company does not depend on its bottomline or the top management halo,” says Singh. “What matters is the feedback the ordinary employee gives his peers in industry and the outside world. IRACE may be a wonderful thing. But it is also a PR disaster.”
Disgruntled employees and departees can also plant stories. As a thinking company, Infosys knows that you can’t make an omelette without breaking eggs. But there is a lot of difference in that egg ending up on your plate or on your face.
AHEAD OF THE RACE
Infosys’ justification for IRACE
We have moved from a delivery-constrained environment to a market-constrained environment. That means the market is going to be the determinant of success. Earlier, it was shortage of people, talent, and so on. That’s gone today; enormous amount of talent (is) available. So we are first off the block of any comparable company to reorganise and restructure ourselves to meet what the market is demanding tomorrow. We have got a competitive advantage. From the strategy point of view, perfect timing, we are first ahead. This is going to force all other companies to go through a reorganisation and restructuring and it’s going to be enormously difficult and complicated and expensive for them to do it at a time when we will be going all out. Second, when we did this reorganisation and IRACE, we made sure that at every point on the value chain or in the structure, we had enough people. So it’s not that we have a shortage of people; we have enough people at every point. Third, as far as disgruntlement goes, people have not seen a reduction in the compensation. They have not seen a reduction in everything that they have. All they are going to see in future is slightly more time for them to go up the ladder. Lastly, we gave an 8 per cent compensation hike and nobody has given that hike. Overall, when things settle down, people will find that we are in a much better situation than earlier and other companies are going to have a lot of fun chasing us. — Mohandas Pai, Infosys director and head, HR, E&R, facilities and administration, at the Open House in Pune on December 7, 2009.
