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
Appendix 2: Sample Career Progression Plan for Technical Stream

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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 iRACE
In 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 iRACE

The 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 Organisational Job Analysis, Position Career Path Implementation
Business undertaking diagnosis and Banding architecture and Integration
 Establishing a joint  Better understanding  Develop area of  Develop talent  Develop
partnership of the organiazational responsibility across philosphy change
approach with needs going forward career streams. across the management
infosys leadership and its strategic  Documents organization. strategy
and the iRACE directions. unique/representativ  Validate and  Detail
PMO with peer  Review, “Asis” band e roles within modify implementatio
defined objectives structure and identify infosys. existing n program
including roles and issue with existing  Assess jobs worth behavioural  Create a
responsibilities of organization through postions competency change
the iRACE team. structure. evaluation framework management
 Assess  Understanding methodology. across the task force and
communication employee  Determine natural organization. construct a
needs and set expectations. progression of roles  Validate and communicatio
efforts in motion  Research industry, through a detailed modify n plan for
to construct a best practices and analysis efforts. existing effective
detailed benchmark practices  Definition of professional change
communication with comparable enterprise band competency management
efforts. organizations. structure. framework  Develop
 Understand  Develop  Fit roles into revised across the linkage to
business context recommendations. structure and analyse organization. support
and determine outliers.  Design career system
human capital path  Roll out new
implications. architechtural structure
across the  On-going
career monitoring
streams. and
 Develop management
progression
and
movement
guidelines.

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Design Principles of iRACE

 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 streams

Employees 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:
○ Amount of managerial support required
○ Additional Tasks
 Professional Competency Assessment

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  Role Maturity
 Consistency of High Performance

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

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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.

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.

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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.

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.

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360-degree Feedback
The 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

Unit Head

Delivery Head Unit Technology Officer

Senior Delivery Manager

Delivery Manager
Senior Project Manager
Project Manager
Principal Technology
Architect
Group Senior Technology Architect
Technology Architect

Technology Lead

Technology Analyst

Senior Systems Engineer

Systems Engineer

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