Strategic Human Resource Management of Infosys Company - Case Study Example

? Infosys HRM Case Overview of the company Infosys is an Indian multinational company that was established in 1981 under strenuous conditions. The company offers information technology, outsourcing, business consulting, and software engineering services across the globe. The company has had a reputation of treating its employees fairly and had over fifteen thousand employees in 2002 a massive increment from the two hundred and fifty employees it had in 1992 (Delong, 2006). The company was founded by seven friends who had the vision of making it a global corporation a task in which they have excelled. The company has had to overcome several difficulties since its inception to stamp its authority in the market. The company has had a commendable annual growth rate of 65 percent from 1993 to 2003. The company first strategy was to be an off shoring company, but in the early stages, it had engaged in body shopping. Body shopping involved the sending of its IT experts to foreign countries to solve their client’s problems. However, the company moved back to its original plan of off shoring due to the restrictions that were facing it inn having the control of a specific project (Delong, 2006). The company prior to the preparation of the case was ranked as the best employer. The company had however dropped in the ranking necessitating for serious restructuring at its human resource department. The company placed a lot of importance on its current and future employees ensuring they were satisfied in terms of their welfare. The remuneration of the company’s employees was over ten to fifteen percent that offered by other companies in the same industry (Delong, 2006). Analysis of the company’s performance The company was founded by Murthy and six of his colleagues who had previously worked at start-up software firm against the discouragement from many of their friends. They started the company on two hundred and fifty dollars that they had borrowed from their spouses. The company’s vision was founded on the principles of creating wealth while adhering to the law and a strict code of ethics (Delong, 2006). All the founders of the company were professionals and they aimed at ensuring that they hired professionals to work for them in their endeavors. The founders envisioned a professionally run company that dealt fairly with all its stakeholders who included the customers, shareholders and employees. The initial face of starting the business was faced with challenges occasioned by the bureaucracy and regulations present in India. The regulations hampered the transactions of the business and limited its ability of becoming a global company. The company had a single client up to 1986 and matters became worse when the United States government placed restrictions on the issuance of visas (Delong, 2006). The action by the U.S. effectively reduced the customer base of the company that nearly collapsed. The company was faced with difficulties when one of the partners left to pursue other avenues in the U.S., which dent a blow to the company’s efforts of growth. Murthy convinced the rest of the partners to stay on in the company with a promise of turning it around into a successful company. The company’s management engaged in restricting efforts that were boosted by the liberalization of the Indian economy. The Indian economy had been faced with negative macroeconomic conditions that forced the government to liberalize its economy dismantling the licensing system that had been used (Delong, 2006). The new conditions in the business market allowed for the conversion and a hundred percent ownership of high-technology companies. The company took advantage of the liberalization of the economy to venture into the Indian capital markets through an initial public offer (IPO). The company moved from body shopping to off shoring as a strategy to counter the restrictions placed by the U.S. government on the limitations of obtaining a visa (Delong, 2006). The company instituted a global delivery model that involved the division of a project into different components that could be executed independently at different locations. The company had undergone various transformations from being a Bangalore company to an Indian company that had its base in Bangalore. It further moved from being an Indian company into a global company that had its headquarters in India. The operations of the company evolved from providing lower end IT services to the provision of higher end value-added services that included IT design and strategy. The company spread its customer base to cover bigger firms like IBM and Accenture. The company invested in people through ensuring that it was the best employer in the market as well as being the choice of potential employees (Delong, 2006). The company went contrary to the ordinary business practices of the time by issuing its employees with stock options. The company invested in new facilities that increased the comfort of its employees to ensure that their productivity was up to scale. The company’s commitment to the employee’s was re affirmed by its policy of listening to their grievances both informally and by the use of a well established grievance resolution mechanism. The company’s efforts to meet the requirements of its employees were met with rising discontent amongst the employees (Delong, 2006). The discontent could be attributed to the increasing number of employees in the company. The company’s employees had until the 1990’s enjoyed stock options at five percent of the fair market value butt the scenario had changed to a staggering eighty-five percent of the fair market (Delong, 2006). The employees felt that the rewards that they had previously enjoyed due to the personal commitment of the management were being repealed as the company transformed into an impersonal organization. The increase in number made the employees complain of their inability to exercise their creativity. The company further introduced the concept of variable payment that had previously been restricted to the company’s senior management (Delong, 2006). The reward of the employees was pegged on their individual performance, unit performance, and company performance. The changes by the company can be linked to its fall from grace. Recommendations The company’s major problems relating to its employment policies stemmed from its growth and the strategies it took to handle its increasing size. The major recommendation from the analysis of the case study is for the company to re institute its previous policies that were established during its formation. Employee remuneration should form the basis of their strategy, with considerations at improving their welfare. The welfare of the employees can be improved through better and standardized pay perks that are not bound to fluctuate with the company’s performance. The company should redesign its stock issuance to favor its employees while at the same time addition complimentary benefits such as medical and transport allowances can help alleviate the company’s relationship with its employees. Reference Delong J., T. (2006). Infosys (A): Strategic Human Resource Management. Harvard Business School, 9 (406-010), pp. 1-11 Read More

 

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