Performance Management System of Infosys Technologies Ltd.

Performance Management Project

PGDM 2009-2011

Submitted to:

Prof. J. Mohanty

Submitted by Group 5 :

Pooja Surana (2009136)

Rachita Gulati (2009157)

Mishleen Khera (2009165)

Neha Zutshi (2009167)

Nishant Sharma (2009170)

Harshit Dixit (2009179)

Table of Contents

Infosys Technologies Ltd........................................................................................................................3

Performance Management Systems......................................................................................................4

Performance Management System at Infosys (iRACE)..........................................................................5

Initiation of iRACE..............................................................................................................................5

Objectives of performance management system of Infosys (iRACE).................................................6

Benefits for employees......................................................................................................................7

Benefits for Infosys............................................................................................................................8

Key difference between the Grade-based structure vs. the Role-based structure vs. the Role + Competency-based structure............................................................................................................9

Program Plan for iRACE.....................................................................................................................9

Design Principles of iRACE...............................................................................................................11

Movement between career streams...............................................................................................11

Expectation of an Employee’s role..................................................................................................11

Factors affecting Progression and Promotion..................................................................................11

Progression will depend upon:....................................................................................................11

Promotions would be determined based on:..............................................................................12

Span of Control................................................................................................................................12

Performance Appraisal at Infosys (PerforMagic).................................................................................13

Goals (i.e. performance measures)..................................................................................................13

Competencies..................................................................................................................................14

Other Aspects of PerforMagic.........................................................................................................15

Performance Interview....................................................................................................................15

Consolidated Relative Ranking (CRR)...............................................................................................16

Variable Pay.....................................................................................................................................17

360-degree Feedback......................................................................................................................17

Appendix 1: Screen-Shots of Performance Appraisal System..............................................................18

Appendix 2: Sample Career Progression Plan for Technical Stream....................................................21

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Infosys Technologies Ltd

Infosys was founded on 2 July 1981 by seven entrepreneurs, N.R.Narayana Murthy, Nandan

Nilekani, Kris Gopalakrishnan, S. D. Shibulal, K Dinesh and with N. S. Raghavan officially

being the first employee of the company. Founders started the company with an initial

investment of INR 10,000.[5] The company was incorporated as "Infosys Consultants Pvt

Ltd." in Model Colony, Pune as the registered office.

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.

Since 2004, Infosys has embarked on a series of initiatives to consolidate and formalize its

academic relationships worldwide under the umbrella of a program called AcE - Academic

Entente. 

In 1997, Infosys started the "Catch them Young Program", to expose the urban youth to the

world of Information Technology by conducting a summer vacation program. The program is

aimed at developing an interest and understanding of computer science and information

technology. This program is targeted at students in Grade IX level.

In 2002, the Wharton Business School of the University of Pennsylvania and Infosys started

the Wharton Infosys Business Transformation Award. This technology award recognizes

enterprises and individuals who have transformed their businesses and the society leveraging

information technology. Past winners include Samsung, Amazon.com, Capital

One, RBS and ING Direct.

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Performance Management Systems

Performance management is the systematic process by which an agency involves its

employees, as individuals and members of a group, in improving organizational effectiveness

in the accomplishment of agency mission and goals.

Employee performance management includes:

Planning work and setting expectations

continually Monitoring performance

Developing the capacity to perform

periodically Rating performance and

Rewarding good performance.

The Rating (appraisal) system of Infosys is called PerforMagic, whereas the Performance

Management System as a whole is named iRACE. The details of these systems are covered in

this project report.

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Performance Management System at Infosys (iRACE)Infosys has adopted a program called iRACE as their performance management system. It

was launched in May 2008. iRACE is a transformational program which was envisioned after

a business strategy review to enhance the capabilities of employees around the globe:

iRACE- Infosys Role and Career Enhancement. The program was initiated to align the

current role-based career structure with the business imperatives, the company philosophy,

the needs of employees and the realities of the marketplace. It delivers a comprehensive

enterprise career architecture which aligns talent management activities with career priorities,

business needs and employee aspirations. It is a platform that clearly defines roles,

competencies and proficiency requirements while linking career movement to performance

and business focus. iRACE involved a detailed diagnostic which consisted of an analysis of

feedback from clients and employees, inputs from industry benchmark studies and the

internal business strategy. It equips Infoscions with the knowledge and experience needed to

deliver greater value for the clients; who in turn will benefit from increased operating

efficiencies and enhanced delivery capabilities.

Initiation of iRACEIn 2002, Infosys moved to a role-based career structure and collapsed 15 Grades into 7 Job

Bands. However, since then, many changes have occurred in the business and the

organization. Key changes included are:

Changes in the business context

Increased customer expectations

Growth in headcount (as in number of employees)

Changes in the organization structure

These changes required Infosys to review the need for the role-based career structure and

move to a model that serves business, client and employee needs better. Through a detailed

analysis effort, it was decided that Infosys needed to move to a “Role and Competency”

based Structure. This new structure will enable Infosys to re-align itself internally and be

strongly positioned to address the changing needs of their clients as well as the industry in

which they operate.

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Objectives of performance management system of Infosys (iRACE)

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Benefits for employees

iRACE empowers employees to design a career of their choice by providing greater role clarity and enabling them to further develop the business, technical, domain and behavioural skills needed in order to enhance and advance their career at Infosys.

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Benefits for Infosys

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Key difference between the Grade-based structure vs. the Role-based structure vs. the Role + Competency-based structure

In a Grade-based structure, promotion is based on tenure. In a Role-based structure,

promotion is based on available slots within the organization and the employees' ability to

demonstrate that they can perform the functions of the next role. In a Role and Competency-

based structure, employees can progress within a role by moving to the next proficiency level

or can be promoted to the next role in a higher job level. However, promotion in this structure

is dependent upon the individual’s ability to perform the requirements of the next role,

including the vacancy of the position into which they are moving.

Program Plan for iRACEThe Program Plan for iRACE included a detailed multi-phased approach to Plan, Diagnose,

Design and Deliver a robust and integrated organization-wide solution. Below is an overview

of each of the phases:

• Phase I: Plan - to understand the business context within which the iRACE program

would be implemented;

• Phase II: Diagnose – to conduct a detailed diagnostic exercise to build the business

case for the change and to arrive at the key design principles for iRACE;

• Phase III: Design 1.0 – to conduct a detailed exercise on the role clarification that will

lead to clear role documents and the establishment of a banding structure;

• Phase IV: Design 2.0 – to conduct a detailed exercise focusing on the development of

behavioural and professional competency frameworks including career path

architectures that will provide a structure to how employees can grow within the

organization; and

• Phase V: Deliver – Formal rollout of the iRACE Program.

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Plan Diagnose Design 1.0 Design 2.0 Deliver

Project planning and

Business undertaking

Organisational

diagnosis

Job Analysis, Position

and Banding

Career Path

architecture

Implementation

and Integration

Establishing a joint

partnership

approach with

infosys leadership

and the iRACE

PMO with peer

defined objectives

including roles and

responsibilities of

the iRACE team.

Assess

communication

needs and set

efforts in motion

to construct a

detailed

communication

efforts.

Understand

business context

and determine

human capital

implications.

Better understanding

of the organiazational

needs going forward

and its strategic

directions.

Review, “Asis” band

structure and identify

issue with existing

organization

structure.

Understanding

employee

expectations.

Research industry,

best practices and

benchmark practices

with comparable

organizations.

Develop

recommendations.

Develop area of

responsibility across

career streams.

Documents

unique/representativ

e roles within

infosys.

Assess jobs worth

through postions

evaluation

methodology.

Determine natural

progression of roles

through a detailed

analysis efforts.

Definition of

enterprise band

structure.

Fit roles into revised

structure and analyse

outliers.

Develop talent

philosphy

across the

organization.

Validate and

modify

existing

behavioural

competency

framework

across the

organization.

Validate and

modify

existing

professional

competency

framework

across the

organization.

Design career

path

architechtural

across the

career

streams.

Develop

progression

and

movement

guidelines.

Develop

change

management

strategy

Detail

implementatio

n program

Create a

change

management

task force and

construct a

communicatio

n plan for

effective

change

management

Develop

linkage to

support

system

Roll out new

structure

On-going

monitoring

and

management

Design Principles of iRACE

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Providing higher degree of role-clarity

Increase technical depth to command better value

Reward delivery of greater business value through providing progression

opportunities within the role to employees

Increase span of control

Rationalize number of unique roles and reporting levels

Change must be simple to understand and easy to implement on an on-going basis

Build flexibility to adapt to growth scenarios

Linking career opportunities to demonstrated competencies

Aligning internal role nomenclature with external designation.

Movement between career streamsEmployees have an option of moving between career streams provided they meet the

competency requirements of the role in the other stream.

Expectation of an Employee’s role

This is dependent on the employee’s specific role. However, every role defined in the iRACE

has clearly defined Areas of Responsibility (AOR). Employees will be provided with the

AOR's for the role as and when the Unit-wise rollouts occur. The Unit Leadership and HR

will work with the employee to better understand his/her AOR's and will assist him/her

through the transition period.

Factors affecting Progression and Promotion

Progression corresponds to the movement of an individual from one proficiency level to the

next proficiency level within the same role.

Progression will depend upon: Complexity of Tasks:

o Amount of managerial support required

o Additional Tasks

Professional Competency Assessment

Role Maturity

Consistency of High Performance

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Promotion on the other hand is a vertical movement across job levels, from one role to the

next higher role. A promotion is a role change, a movement to a higher job level and a higher

level of responsibility.

Promotions would be determined based on: Consistent High Performance

Potential Assessment of Ability to play the role under consideration

Certifications for the Role

Professional Competency Assessment of current and next role

Behavioural Competency Assessment of current and next role

Overall Experience and Role Maturity in current role

Other Assessment Criteria (Example: fulfilment of core/ differentiating experience)

Promotions are location-based. If one is eligible for a promotion and accepted to move to

another location, one will need to make a commitment that one will stay in that role for a

considerable period of time to discharge the responsibilities of the new role. Also Roles are

linked to Span of Control which will be closely monitored.

Span of ControlThe span of control effect has been analyzed in detail and found to be related to an increase in

effectiveness and efficiency of business operations as well as people engagement - this is for

both the individual and the organization. Span of Control is used for defining the number of

people who can report into a given role. As an organizational guideline, we use the 1:11 ratio.

This means that the maximum number of people who can report into any managerial role

should not exceed 11.

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Performance Appraisal at Infosys (PerforMagic)

PerforMagic is the online performance appraisal system at Infosys. It is used by all

employees, except temporary employees. Any employee who has been with the company for

more than one appraisal cycle is eligible for appraisal. Performance appraisals occur twice a

year – the mid-year appraisal is in May and the annual appraisal is in October.

There are two components in the PerforMagic appraisal that are used to track overall

performance during the appraisal period. The two components are:

Goals

Competencies

Goals (i.e. performance measures) 

Goals are indicators measured against pre-defined targets to assess an employee’s job

performance.  Each goal derives from critical elements of the employee’s job and needs to

adhere to the SMART criteria: Specific, Measurable, Achievable, Relevant and Time-bound.

All Infosys job descriptions have pre-defined performance measures which are auto

populated in the PerforMagic system and form the basis of evaluation. For example, in the

sample screenshot of a Software Engineer’s appraisal (given in Appendix 1), the performance

measures are Scheduled Adherence, Delivered Defect Target Adherence, Effort Adherence –

Planned Activity.

Prior to a performance period an appraisee and appraiser need to set targets against goals that

are relevant to the employee.  This is called Goal Setting. This is where an appraisee and

appraiser can decide of individual goals, relevant to the employee's work. The process of goal

setting is where the appraiser defines a percentage weighting for each goal category, with the

total adding up to 100 per cent. An appraiser (the person evaluating the appraisee’s

performance – usually their line manager) is responsible for rating the employee’s

performance against these set goals. In the sample screenshot, these Individual Utilization

Measures are Billable Utilization (10% weightage) and Total Utilization (90% weightage).

The appraisee is also required to self evaluate their performance against the agreed goals.

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Appraisers set out tasks on the basis of which employees are rated. Employees working in

similar roles in a Project (or a group of projects) are given the same tasks on which they are

rated. The appraiser will base the employee’s task rating on five key parameters: timeliness,

quality of work, customer orientation, providing optimal solution and team satisfaction.

However, the appraisee in the self appraisal does not rate each parameter. He/she just rates

the task as a whole. There are 5 grades on which these rating are given: A, B+, B, B-, and C.

In a Software Engineers role, maximum weightage is given to programming. For Example, in

the screenshot provided, the tasks set out for the employee are

1. Programming and Testing (50%)

2. Technical Knowledge* (20%)

3. Quality Practices Followed (10%)

4. Knowledge Sharing (15%)

5. Other Activities (5%).

After the grading their tasks, appraisees also write comments on each of these tasks i.e. what

relevant work they have done during the appraisal period in each of these categories.

These assessment criterias can be changed once a year if required.

*This covers the new Technical Knowledge relevant to the technical work/domain of the project that the

employee has garnered during the appraisal cycle. Every employee is required to do 2 Infosys Certification

Programs in a year – One related to the technical field he/she works in and the other to the domain he/she works

in. Without clearing both these certifications, the employee is not eligible for appraisal.

Competencies

Competencies are abilities – or a cluster of related knowledge, skill and attitude – that

correlate with an employee’s job performance. Each job description includes a list of defined

competencies that are required of the person appointed to that position.  An employee’s

aptitude in a particular “competency” can be improved via a range of learning experiences,

including on-the-job experience, mentoring, and internal and external training.

Infosys measures two types of competencies – behavioural competencies (e.g. team

leadership) and technical competencies (e.g. programming knowledge). An employee’s

“competencies” are also included in the PerforMagic system with the appraiser evaluating

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each competency according to one of five ratings. These 5 ratings are – More than

Satisfactory, Satisfactory, Neither Satisfactory nor dissatisfactory, Dissatisfactory, Extremely

Dissatisfactory.

For Example, in the screenshot provided, the Technical Competencies identified for a

Software Engineer role are:

1. Technical Knowledge

2. Testing

3. Quality Planning and Practice

4. Programming

5. Design

6. Analysis.

The Behavioural Competencies identified are:

1. Analytical Ability

2. Communication

3. Innovation

4. Team Work.

Other Aspects of PerforMagic

Apart from these, appraisers list out certain Key Strengths of the appraisee and any instances

of Exceptional Performance shown by the appraisee during the appraisal period. These

motivate the employee and help him build his areas of strength.

Performance Interview

Once the Self Appraisal has happened, the appraiser sets out time for a Performance

Interview. At this interview, the work done by the appraisee in the last appraisal cycle is

discussed and the appraiser tells him/her the ratings he has given the appraisee in the various

measures/ competencies. Reasons and logic for the same are given.

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Apart from this, goals for the next appraisal cycle are set out. The appraiser and appraisee sit

need to agree on these goals. Other than goals for the Performance Measures and Individual

Utilization Measures, training goals are set out also.

Infosys places very high Focus on Learning. The appraiser suggests trainings/ workshops

that the appraisee can undertake in the coming cycle in order to improve his/her competencies

as well as to meet (future) project needs. Soft Skill training needs are also ascertained

depending on the project requirements.

Consolidated Relative Ranking (CRR)

All the ratings till now were absolute ratings. Once these ratings have been given, employees who

are performing similar roles are placed in one group and ranked relatively. These ratings are called

Consolidated Relative Ranking or CRR. There are 4 ranks in CRR. CRR 1 is given for the highest

performer and CRR 4 indicates rank for low performer. Though it is not very strictly followed, the

general rule is :

For employees who receive a CRR 4 rating, Infosys has implemented a six-month mentoring

programme, after which it will decide their future based on the improvements they have

made. As a part of this programme, each affected employee is asked to work under the

supervision of a mentor who is a senior executive.

During this period, the employee will not be given any important assignment, even though he

will be allowed to work on the project where he is working at present. If the concerned

employee is on bench, he will give all his time for the mentoring programme. During this

time, the employee will get full salary as well as the regular allowances.

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Top 5% of performersCRR 1Next 45% of performersCRR 2

Next 45% of performersCRR 3Bottom 5% of performersCRR 4

Infosys Vice-President and Group HR head, Nandita Gurjar said, "While 50 per cent of such

employees come back to the system, others get the message and quit voluntarily in most

cases".

Variable Pay

If an employee is eligible for a variable payment (as part of their achievable salary package),

the value of their individual incentive is derived through the performance appraisal and CRR

process.

360-degree FeedbackThe 360-degree feedback at Infosys is optional. If the employee feels the need for a 360-

degree appraisal in order to improve him/herself, he can opt for it.

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Appendix 1: Screen-Shots of Performance Appraisal System

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Appendix 2: Sample Career Progression Plan for Technical Stream

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Technology Lead

Systems Engineer

Senior Systems Engineer

Technology Analyst

Senior Project Manager Group Project Manager

Project Manager

Senior Delivery Manager

Delivery Manager

Delivery Head

Senior Technology Architect

Technology Architect

Principal Technology Architect

Unit Technology Officer

Unit Head