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We know that Change is an important and integral part of every business, and these changes could happen voluntarily as a part of the organizations initiative or involuntarily as a reflex effect due to the changes in business environment or even as a response to fluctuating economic trends. Whenever an organization desires to bring about a voluntary change in its existing system, the process that has to be followed to bring about the change is very important, as a very small mistake could lead towards a great resistance from the employees. And this kind of a mass resistance would normally mean mass attrition and in turn, large scale capital loss. I take this opportunity in throwing light on one of the miscalculations made by a leading software services company in world, in bringing up a major systematic change.
Introducing the Company - Infosys
Infosys is a Software Services Company headquartered in Bengaluru, India. It is one of the largest IT companies in India and has offices in 33 countries and development centers in China, Australia, UK, Canada and Japan.It is founded by N.R.Narayamurthy who currently is the Chairman of the company.
Figures about the Firm (Data as of March 2010):
Infosys Public Services
This company is formed in 1981 by seven entrepreneurs, Nagavara Ramarao Narayana Murthy, Nandan Nilekani, Kris Gopalakrishnan, S. D. Shibulal, and K Dinesh and with N. S. Raghavan, Infosys was incorporated as Infosys Consultants Pvt. Ltd. It went public in 1993. In 2001, it was rated Best Employer in India by Business Today. Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications and hired fewer than 3% of applicants. Infosys was the only Indian company to win the Global MAKE (Most Admired Knowledge Enterprises) award for the years 2003, 2004 and 2005, and is inducted into the Global Hall of Fame for the same.
Infosys Members of the Board
Director and Head, Delivery Excellence
Director and Head, Communication Design Group,
Information Systems and Quality and Productivity
T.V. Mohandas Pai
Director and Head, Finacle, Admin, Human Resources,
Infosys Leadership Institute and Education and Research
Chief Operating Officer and Member of the Board
Chief Executive Officer and Managing Director
Murthy Chairman of the Board and Chief Mentor
Deepak M. Satwalekar
Lead Independent Director
Dr.Marti G. Subrahmanyam
Jeffrey Sean Lehman
Aerospace and Defense
Banking and Capital Markets
Consumer Packaged Goods
Hospitality and Leisure
Logistics and Distribution
Studios and Networks
Independent Validation and Testing Services
Information Management Services
Packaged Application Services
Systems Integration Services
Manufacturing Process and Plant Solutions
Core Process Excellence
Information & Technology Strategies
Learning & Complex Change
Next Generation Commerce
Offerings by Industry
Banking and Capital Markets
Communication Service Providers
Energy and Utilities
Media and Entertainment
Retail, CPG and Logistics
Offerings by Function
Customer Service Outsourcing
Finance and Accounting
Human Resources Outsourcing
Sales and Fulfillment
Sourcing and Procurement Outsourcing
Products and Platforms
Infosys Research On Demand
Infosys Unified Communications and Collaboration (UC)
Supply Chain Visibility
Industry-leading Services in the Cloud
Professional services for the Cloud
Every change in an organization triggers a resistance from the work force. The resistance levels could be very high at times that they could almost drive the workforce to raise and revolt in the form of agitations and mass walkouts. During these times the employees feel that the plans by the company to induce the change are going to benefit the company only and are not targeted to help the employees but will put them through non-profitable transitions. Such kind of an Error I feel was committed by the Infosys HR, which failed to properly educate its employees, about the pros and cons of a change which resulted in a massive loss of their Human resources.
IRACE (Infosys Role and Career Enhancement) - started in October 2009
It was in October 2009 during recession that the leadership of Infy (Infosys) decided to launch their new HR policy, the Irace. The new phase wise changes as per the policy were:
Mapping of entire employee strength.(spotting employees with low capabilities and high positions)
Hiring and promotions/Demotions based on mapping
Defining new role paths
Performance management(rating employees basing on their capabilities and strengths)
All the employees of an organization always like to increase their position or pay package, rarely one would find a person that likes to get demoted or work for a lesser pack. Infy almost with Psychological Myopia missed out on analyzing the future reactions of its employees as of how they would react to a process that includes the matching of their capabilities to their current positions and taking decisions around the analysis, which mostly resulted in the demotion of the employees. This move by Infosys was driven by an idea of making a competent work force working at their deserving positions. The policy also compelled the employees to work overtime, which was 9.15hrs a day. It was then that Infy won the 'Best employer' award and many of the employees questioned the criteria on which Infy was awarded.
Eventually this policy resulted in a lot of resistance from the employees who felt that the idea of the firm behind the introduction of this policy is to stay contained by lessening the work force; they also felt that this is a way of cost-cutting. Even the competent work force felt that they change is going to help the company and the company only, but not the employees. However the company was just trying to readjust the positions of its employees to streamline the hierarchy by placing them according the positions that are really deserving.
As per Ms Nandita Gurjar (HR Manager) "Under this initiative, the employees get an opportunity to choose between various streams, departments and domains. They would learn about various skill sets, certification and technologies required to join the preferred stream after acquiring which they can switch their roles."
Results of Resistance
Many employees that feared demotion and termination submitted their resignations beforehand so that their track records are not spoiled due to the change, and which the company has to freeze all the exit interviews of the season. Almost 4000 employees resigned which was 3% of its total workforce and was really a big effect. Many disgruntled employees showed off their angers in the company's intranetworking website sparsh. They abused the media and wrote comments and blogs against the management and the company. Many employees posted blogs and created hate communities in Face book and many others expressed their concern in Twitter.
Ms Gurjar somehow tried to reach the employees through the company's intranet website by accepting and inviting feedback from them. Enormous negative response was received which featured disgruntled employees showing off their anger through the website. She writes blogs and changes topics every Friday and the employees are free to participate, the blog was getting around 30,000 hits.
"Now we have made things open and transparent with official blogs. Here the difference is they put an email id, even when they write junk," she adds, "I will any day respect somebody who comes out with his email id and say I hate this (any policy decision). And they write to me directly, I don't even need a blog,"
Few employee reactions:
Dissatisfied employee's comment in the internet
Infy is no more a good company... They create hype to outside world as its good company... Don't join infy...
I joined infy last year as lateral but affected by IRACE, even after follow-up with DM & HR there is no change...
Moreover, infy has no good projects in SAP. SAP practice is very boring.... SAP professionals must not join infy at all...
Even i am looking for opportunity outside infy... Hope I get good oneâ€¦
Mohan das pai & Nandita Gurjar make infy down, if this continues, infy may shut down..."
"I quit Infy bcoz of IRACE. The policies are just hopeless. Also the certifications suck everything out of you. You become just robots slogging the whole day just to get an average performance in the appraisal."
"I am a long service employee with 8 years in Infy. I got impacted by the IRACE mapping (in-fact everyone is) and aspirations have been curtailed by 2-3 years..."
"Thanks to the recent attrition rate in Infy, the management came to the fire-fighting mode and "re-fitted" the employees to the earlier level who were earlier "fitted" to a lower level."
"The environment sucks and the HR comes up with one crappy policy to other. Currently, if you want even a pen and notebook, you need to raise a request, go to the other building between 10 and 12 and answer all the questions to the facilities person has and if he is satisfied, you can get these. I know of people who were denied more than 1 pen and notebook in a month! You cannot take Xerox, send fax, and take more than 40 print-outs a day... The list goes on and onâ€¦"
"This is not the same company I had joined 8 years back and I am now looking outside for a more relieving environment to work where these hygiene factors (from employee's perspective) are present!!"
A disgruntled posted in a public forum
"Infy is worst company I have ever worked... The policies in infy are simply a waste and worse than government organization... It rarely bothers about employees, it only wants to get the work done from employees at lower cost... It puts less people on project and gets more work done from them...
MD Pai and Ms Nandita made infy worst... I wonder even after thousands of people left because of IRACE nothing happened to these guys, they keep saying all is well... To improve infy, they should be thrown out...
Now they are saying they will recruit 40k people, but around 25k experience people would have left...
ES is worst, no good projects in SAP & Oracle applications, even many good DMs like sai vissa etc. left and many more on Q...
Don't ever make by joining such a bad company...
Nandan left, now NRN leaving, I can't imagine how these donkeys lead the company, it will be in donkeys hand with monkey's play... It's a Shame!!"
The management tried and failed repeatedly in convincing the employees to show patience. The effect of the anti Infy canvassing by its own employees proved to be a heavy boulder on its reputations. The leadership still continued to implement the policy, regardless of the resistance. The policy is in use till today, the resistance had been reduced, but the company lost on a lot of Human Capital.
Meanwhile the Infosys made its campus selection process more stringent, by visiting lesser engineering colleges and hiring lesser students. As per Ms.Gurjar, the company visited just 300 engineering colleges, against its regular 1000, and they increased the test and percentage cutoffs which helped them in picking up top-students in various colleges.
Intervention by the company
The company after a severe resistance from the company did not discontinue the policy, but relaxed a few norms of the policy later in 2010 and promoted 8500 employees.
It dealt with the attritions problems by freezing all the exit interviews, so that the tempo of the resistance gets slowed down, so as to allow more time for the employees to think upon their decision.
Ms.Gurjar opened up opinion polls and invited comments in her blogs about the policy.
The Company requested its employees to restrict criticism to the media inside the Company and also requested them to come up with an open thought, rather that criticize openly in the external media.
Interventions that should have been made
The company should have:
Educated the employees about the change, the pros and cons of the change have to be well informed to the people that undergo the change. When the pros and cons are known in the first place, the employees don't revolt as the change will be a known change to them and there is not going to be much of uncertainty.
Employees should be made a part of the change, as they would be feeling a sense of responsibility as they would be a part of the planning body. When employees participate right from the initial phases, they would like to play major role in the change phases too.
Training must be provided to the employees so that they face the new challenges due to change with enough knowledge and expertise.
Make the change a developmental activity: the outcomes of the change should be of a kind that will develop the employees, but not demote them in any way.
Foster cooperation among the groups of the employees.
Finding the solution to the raising resistance rather than subjugating the issue.
Any organizational change that is aimed at development of the company should be induced at utmost care. Many changes that are capable of helping the employees and the company with a lot of development are being resisted by the employees, due to an improper change management process by the leadership.
So, a simple planning of change implementation could largely reduce the revolting attitude of the work force. Global IT giants like Infosys too could fail in this process due to Corporate Myopia, which makes them feel that they know almost everything that they ought to do, when they know nothing. So it is advisable to run a lot analyses on the organizational behavior and the employee behavior, before directly interfacing with the employees with the change.