Terms of Endearment

EVERY week day, at around 5 pm, a Tata Sumoand a Maruti Gypsy patrol Bangalore’s Hosur Road to ensure things are goingsmooth on the stretch notorious for traffic jams. The vehicles belong to the Bangalore traffic police.Alongside, a dozen constables stand on special duty to clear the way for thefleet of buses leaving Infosys Technologies Ltd (ITL). The vehicles, as well asequipment like sirens, year-long fuel supplies, and walkie-talkies, aredonations from Infosys to the traffic police. The gifts, worth Rs 14 lakh, aremeant to ensure a smooth passage home for the Infoscions—employees of thecompany—after a hard day’s work. For Infosys, it’s a routine exercise inhuman resource management.

And not the only one practised by the leading Indian softwareproducer whose revenues grew by 150 per cent during the last two years.Elsewhere on the sprawling five-acre facility in Electronics City, softwareengineers walk in and out of work at any time of the day so long as they put in45 work-hours a week. And lest all work dull their minds, play is provided atthe basketball and volleyball fields, and rest at the company’s health club or the sauna. For thoseartistically-inclined, their creative flourishes get a display at the Galleriede Art Infosys. Computer freaks, reluctant to let go of their PCs, can seekrefuge at Cyber Cafe, and cruise along the infobahn or browse through theInternet.

Meanwhile, refreshments are a short distance away. Near aperfectly-landscaped garden, a kiosk vends coconuts, soft drinks, cigarettes andpotato chips. Beverage stations on the company’s three floors dispense a total2,400 cups of tea and coffee daily while two canteens provide meals at 50 percent subsidised cost. Men and women have a separate dormitory each, and can alsoavail the facilities of an in-house doctor, a creche in nearby Kora-mangala, aswell as travel in the 15 buses that ply 1,200 km daily.

Says N.R. NarayanaMurthy, CMD, ITL: "In this business, the key challenge is to recruit,enable, empower and retain the best professionals in the business. And at theend of the day, it’s the people who matter." Meeting their objective ofbeing the most "employee-friendly" company in the software industry.Adds Subrahmanyam Gopa-raju, 29, a project manager who has been with ITL foreight years: "The campus-like workplace is certainly critical as the company mostly recruitsfreshers from engineering colleges and IITs. This environment helps in thetransition from a campus to a semi-campus but productive environment."

 Thecompany’s unique personnel policies has other employee welfare measurescontributing to its stupendous growth: from an initial investment of Rs 10,000in 1981 to a turnover of Rs 93.4 crore in 1995-96, establishing it among the top10 in the Rs 3,760-crore software industry. And Infosys believes in sharing thiswealth and success with its employees. Equity participation by Infoscions hascreated at least 50 millionaires among its employee stockholders.

The company’s Employee Stock Offer Plan (ESOP) grants 7.5lakh warrants to employees through an Employee Welfare Trust which entitles themto a share at the end of the five-year lock-in period. This ensures that theemployee stays with the company for at least five years to be able to transferhis share, the value of which currently hovers around Rs 700 per share at theBombay and Bangalore stock exchanges. Today, there are 300 employees, bothtechnical and non-technical, who hold stocks in the company, up from 50 in 1993.

In addition, Infosys has a specified 10-point programme thatincludes arranging house loans to handling personal mail (see box).Employees are also offered an incentive of one month’s salary up to a maximumof Rs 10,000 if they refer a professional working elsewhere for a vacancy inInfosys and the candidate is recruited. Says T.V. Mohandas Pai, seniorvice-president (finance and administration): "The idea isto enable peopleto build up asset levels and grow with the company. The key strategy to retainpeople is sharing of wealth." 

The concern doesn’t end here. Infosys alsoaims at providing a professional environment at level with the best abroad. SaysK. Din-esh, director (quality and productivity): "Early empowerment ofpeople to do activities they may not be allowed elsewhere is a key to the growthand retention of employees. An Infoscion who has five years’ experience canbecome a project leader with about 25 people under him while the same is notpossible in other companies." 

And technological facilities match thecompany’s effort at intellectual growth: a PC with Pentium servers for eachemployee, video-conferencing for projects, Intranet,web-based products, four 64kbps communication lines, a direct link from Bangalore to Boston where ITL hasits US office, and the latest database systems in the world.

 It’s notsurprising then that attrition levels at Infosys are way below the industryaverage of 20 per cent. Between January and May this year, only about 50employees ofthe total 1,163 quit the company for presumably brighter pastures.Says Nandan M. Nelekani, deputy MD and a founder-director: "Whileinnovations like the ESOP and transparency in accounting are unique only to theIT industry, the fact is they are more required here in a knowledge-intensiveindustry. It’s surprising that it has not been emulated by others." Thiscould be because of the historical model of the Indian software business whichis dominated by large business houses or TNCs. While software companies that arepart of large business houses follow the larger policies of the group, TNCs takeorders from their headquarters, leaving little room for innovation. 

No suchconventions bind Infosys—a company founded and managed by engineeringprofessionals. Says Dr A.L. Rao, group vice-president, Wipro Infotech: "Anyemployee welfare measure that binds an employee to the company is today mostrequired in the software industry as it is a critical parameter for employeeretention. Attrition is one problem being fought by all companies and welfaremeasures definitely have an impact on retention." Adds Mur-thy: "Thedifference between Infosys and other companies is that our policies aredetermined by full-time professionals who understand the mindset and aspirationsof professionals working under them."

 A difference, perhaps, that has donewonders for the company’s bottomline.