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After weeding out non-performers from its top levels, Infosys, India’s second-largest information technology (IT) services company, is closely assessing the performance of its mid-level employees.
According to sources in Infosys, as well as in other companies in the sector, recently, several delivery managers, project managers, account managers and relationship managers have exited the company, primarily due to non-performance. Though the number of such exits isn’t known, some sources claim it could be about 60. While Infosys refused to share the details, a company spokesperson said the company evaluated employees’ performance on a routine basis. “Those who do not perform consistently are put through a performance improvement plan lasting 60-90 days. If the employee concerned doesn’t show any improvement after this, he/she is encouraged to find opportunities outside the company.”
Sources at the company said under the performance improvement plan, the company had started putting low-performers through two months of training, after which they underwent an appraisal. Those who failed to clear this were asked to leave.
Since co-founder N R Narayana Murthy returned to the company as executive chairman in June 2013, Infosys has seen a slew of high-level exits. The included the exits of board members, and Ashok Vemuri and V Balakrishnan, both contenders for the chief executive’s post.
The company is also seeing a rise in overall staff attrition. For the December 2013 quarter, Infosys’s attrition rate was 18.1 per cent, the highest among its peers and a stark contrast to rival Tata Consultancy Services’ attrition of 10.9 per cent.
Replying to investors’ concerns about these exits, Murthy said most of those who left Infosys weren’t adding much value to the company. “Barring some rare exceptions, the exits were of people who were deriving very high salaries, but unfortunately, we were not getting value from them. Therefore, they realised there would not be much growth for them and left the company,” Murthy said at an investor conference organised by Bank of America Merrill Lynch in Mumbai last week.
In his past few public speeches, Murthy has communicated a tough stand on performance. “Performance is absolutely essential for us. We will provide all the help to people to perform better and, if for any reason, they are not able to perform, we will have to bid them goodbye,” he had said.
Even as experts fear the exits could cause some damage to the company, some analysts feel Murthy’s focus on a strong sense of meritocracy is a step in the right direction, as the company became victim of some non-performers holding key roles through the past few years.
“The company continues to strive for meritocracy and has set the tone for intolerance towards mediocrity. According to our sources, the restructuring process initiated at the top of the pyramid has now percolated to the middle. This will not only improve service delivery, but also right-size the pyramid,” Shashi Bhusan, senior analyst at brokerage firm Prabhudas Lilladher, said in a note published earlier this week.
“According to the management, the customer satisfaction survey and engagement-level feedback have shown improvements through the last few quarters. Moreover, we expect the metrics to improve, as the restructuring process continues to take centre stage,” he added.
