India’s second-largest IT company, Infosys, has thrown a lifeline to its poor performers — with a rider. They will be given two months’ training to get into shape. After the ‘performance improvement programme’, they will undergo an appraisal and those who fail will be asked to leave, said an Infosys spokesperson.

The spokesperson did not reveal how many have been asked to undergo training. The IT bellwether has over 150,000 employees on its rolls.

Restructuring exercise

This initiative is part of a major restructuring exercise to right-size the pyramidal structure of the organisation. It started at the top and has now percolated to the middle rung.

The programme comes close on the heels of a recent statement by Infosys Chairman NR Narayana Murthy at a Bank of America Merrill Lynch Investor Conference that non-performers who draw high salaries will be asked to leave. He had also assured analysts that Infosys was undertaking several programmes to increase employee productivity and would continue to reduce on-site costs by shifting work offshore.

According to an analyst at broking services firm Prabhudas Lilladher, Infosys wants to weed out mediocrity and the initiatives aim to improve efficiency at all levels. The company’s growth has decelerated, hurting margins.

Since 2010, software development expenses have increased by 67 per cent per employee, while sales and general administrative expenses per employee have shot up by 85 per cent.

The management, which recently conducted a customer-satisfaction survey, found that clients have started giving positive feedback. With the restructuring process underway, several performance parameters are also expected to improve, the brokerage house said.

(This article was published on February 26, 2014)
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