The Hindu Business Line : ‘Managing employee psyche tough in a slowdown’

The priorities of a company, especially of HR, change drastically during a slowdown. From bringing in cost-cutting measures to dealing with forced attrition to managing morale, HR assumes a different role each time.

“Believe me, it’s tougher during a recession, because HR for the first time is facing the problem of managing the psyche of the trapped employee,” says Nandita Gurjar, Senior Vice-President and Global HR Head, Infosys Technologies.

In an interaction with The New Manager, Gurjar says this is the best time for companies to build a brand internally with employees. She also talks of how India’s leading IT company is adopting recession-based HR practices such as better communication, a Performance Improvement Plan, variable pay and cost efficiency in managing human capital.

How do priorities for an employee-friendly organisation change during a downturn when compared to an upturn?

Whether in good times or downturns, it’s never ‘cool’ for HR. There is always enough work, though there are some shifting priorities. As an organisation, employees are our utmost concern and at Infosys, during a downturn or an upturn, the larger realities remain the same; i.e. keeping the employee engaged. The focus is now shifting from recruitment to allocation of benched employees and ensuring that they are not on the bench for too long.

There has been a muting of recruitment at the company, so we told the recruitment division that they must become more responsible for ensuring that benched employees are allocated properly. Also, we asked them to keep the interface with colleges going because they would have to go back to campuses when the upturn happens. The department did a very good job and came out with a strategy. Each department came up with what HR should be doing for the next two years.

What are the new HR strategies aimed at coming to terms with the situation?

Instead of reacting in a knee jerk fashion to what business wants, we are of the opinion that the principle of HR cannot change. We are not a hiring and firing organisation. The management has come up with the philosophy of keeping the flock together for the next two years. We should also ensure that people who stay back don’t feel like trapped employees.

Who are ‘trapped’ employees?

For years now, IT has only seen boom times and employees have not seen a downturn. They always had two-three jobs on hand and told HR ‘if you don’t give us this or that, we are leaving.’ But now the scenario has changed and they feel ‘trapped’ in their organisations. Even HR has not been trained to handle the psyche of the ‘trapped’ employee. We only knew how to handle attrition and picked up skills for retention. It’s very easy to start viewing employees as ‘scared, cynical and frustrated’ and treat them like ‘you no longer add value here, but you have nowhere to go.’ If the organisation takes this view, it could pass it to on to employees through their body language. What kind of impact does it have on the performance of employees?

It’s too early to say whether performances will be affected. There could be a negative psychosis that is spreading. We also realise that it’s the best employees that make the shift and a turnaround. If you damage their psyche, then they stop adding value and innovation stops. Pumping in the right philosophy is very critical. We have advised all our managers that there should be a pouring in of communication.

Can you talk about a few cost-cutting measures that you have introduced?

We need to have a view that business is going to be bad and will get tougher. When we decided to adhere to our plan for 20,000 campus offers, there was negative press, but we believed that we had to stick to the offers already made. And all of us inside believe we have to pay a price for this, whether it’s foregoing promotions, increments, variable pay, etc.

People on the bench are asking us why the company is taking in more candidates from campuses when there is already a bench waiting to be deployed. We have assured them that those who have been benched for longer will get priority.

I think it’s very easy to cut down on niceties like transport frills, food, coffee, gatherings and reward and recognition, which will not save much for the company. We should also be concerned about the impact on employee morale .

At Infosys, we may decide on budget cuts and not do away with parties and events altogether. We may have larger gatherings, but we’ll not let go of events and reward and recognition schemes. You can’t make everybody feel like losers.

We are cautious about any policies that come out now and are getting more sensitive about how we communicate. At the same time, we are making sure the communication is honest and transparent. I think the most important competency of an HR professional is personal credibility. Also I think this is the best time for employers to build a brand for the company. In good times, you focus externally, during a downturn, you must focus internally.

Are you planning to make your performance appraisal system more stringent? How are you going to differentiate average performers from outstanding ones?

We have always had a strong performance management framework. As per the normalisation curve, we put the bottom five per cent in the performance improvement plan. In the PIP, there has always been a certain percentage (almost 50 per cent) of people that came back into the system after going through the improvement plan for three months. This year, we’ll have to see how it goes. While the process remains identical, what is different is that there would be no other job within the organisation that people can be deployed on. Of course, we have no tolerance for low performers and I’d rather protect people on the bench.

How is Infosys working towards bringing in more cost efficiency in the human capital area?

Our first call was to look at restructuring the senior management where people costs are much higher. At Infosys, we don’t touch the entry level and junior managers because here costs are lower. We are comfortable letting go of non-performers among the seniors. Then there was a cut in the variable pay of senior management. This is also because the senior management which can make the upturn happen is getting more responsible.

Is there a complete freeze on hiring at Infosys?

Hiring is happening but only in places where we don’t have skills. There are several internal job postings and movement inside the company has increased by almost 50 per cent. We’ve told employees, for the next two years, don’t protest and just get billed first.

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‘Managing employee psyche tough in a slowdown’