Key Strategic HR Issues/ Problem Statement
Research has shown that in order to achieve organizational success, firm cannot only rely on technology, marketing tools or strategic performance as their source of competitive advantage. Firm has to also know how to manage their workforce. (Pfeffer, Competitive Advantage Through People: Unleashing the Power of the Work Force, 1995). Youndt et al, (1996) even goes as far as commenting that people might be the ultimate source of a firm’s sustained competitive advantages since traditional sources of competitive advantage like economies of scale and etc have been weakened by economic changes and globalization. Resource-based view furthur support this theory claiming that due to the difficulty of duplicating human capital , human is a crucial source for company to gain competitive edge. (Chan, Shaffer, & Snape, 2004)
Infosys is a software firm founded by Narayana Murthy with 6 of his collegues back in 1981 in India. Initially the company provide lower end IT services(i.e IT implementation), but over the years, it has expanded into providing higher end value added services(i.e IT design/strategy) as well as end to end IT solutions at the global market. Infosys has experience growth from a 7 man company and start up cost of $250 in 1981 to 15,000 employees with a revenue of USD 754million in 2002. In 1999, Infosys was doubling in size every 20 months and this rapid growth forces management to implement a series of change in their human resource managemet in effort to improve their productivity, cost competitiveness and efficiency. (Delong, 2006)
Infosys was known to recognise its employees for its tremendous growth., its vision from the start in regards to its people aspect was to be the Best Employer or Best Employer of Choice for potential employees. However, in 2003, Infosys got its first major wake up call when they toppled from the Best Employer List after being ranked first for 2 consecutive years in 2001 and 2002. Survey shows that employee dissatisfaction was on the rise. While change is inevitable in a modern company especially a fast growing one like Infosys, Infosys soon realise that the changes they made since 2001 caused deemphasizing of its traditional corporate culture initiating employee dissatisfaction. Mismatch expectation and poor communication within the firm furthur fuel this issue. (Delong, 2006)
For example, the rationale of the changes in the firm like broad-banding was to better informed the employees on what to achieve in order to be promoted to the role that they wanted. However, this change may initially looked like an added advantage for the employee’s career planning ,but, for a company like Infosys, where its traditional culture of having a small company feel and collegial environment where processes were flexibile and customized to individual needs, this change makes the firm seem more impersonal. Promotion are now not the department head’s call but through a process of...