NARAYANA MURTHY AND INFOSYS
 INTRODUCTION
THE STRATEGIST
PEOPLE MANAGEMENT
Analysts felt that one factor which helped Infosys to grow at a faster pace
than others was the low employee turnover. The turnover rate at Infosys was
around 11% as opposed to industry average for software companies' of over 25%
during the 1990s. Infosys' retention capability was a function both of its
rigorous selection procedures as well as proactive HRD practices. About 80% of
the middle and senior level executives were promoted from within the
organization.
Infosys provided many facilities to its employees, which were intended to take
care of both the professional and personal needs such as ticketing, credit
cards or house loan applications, crèche facilities for kids, a gymnasium to
work out etc.
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Infosys was one of the first companies to adopt an
employee stock option plan (ESOP) and create additional wealth for its
employees. Narayana Murthy believed that employees created wealth and
unless Infosys had a mechanism to make them principal shareholders, it was
unlikely to grow. By 1997, 500 employees were awarded stock under the
ESOP. By 2001, Infosys had about 2000 rupee millionaires on its staff and
more than 213-dollar millionaires.
Analysts felt that Infosys had one of the best reward systems in the
industry. Most employees in Infosys were paid high salaries by industry
average for software companies. Narayana Murthy said, "My employees seek
challenging opportunities, respect, dignity and the opportunities to learn
new things. I keep telling them that my assets are not this building, the
business or foreign contact. My assets - all 8000 of them - walk out of
the gate every evening and I wait for them to come back to me the next
morning[1]." |
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Employees were encouraged to communicate with each other and with the
higher management about interesting ideas and ways of solving problems
through the electronic bulletin boards. To improve communication, the
managing director sent mails every fortnight. There was also a concept
called the Chairman's List[2] and an annual excellence award. However,
groupism was not encouraged. Narayana Murthy explained, "Everything is
judged on merit. Ego doesn't come into the picture. Our transactions are
zero-based so there is no history sheet. Different people compete, then
they have a discussion, one solution is accepted, one person wins, they
smile and go out to lunch. Because the group of people is very smart,
there has to be a uniform distribution of wins. There are no overt or
covert prejudices[3]."
CORPORATE GOVERNANCE AND INFOSYS
[1]Business Standard - Strategist, December 2000.
[2]An annual list comprising outstanding performers who
received employee stock options.
[3] Business Standard - Strategist, December 2000.
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